Next Fifteen Communications Group PLC (AIM:NFC) has noted the announcement today by M&C Saatchi PLC (AIM:SAA) that it has posted a notice to reconvene meetings for October 31, 2022, in order for shareholders to vote on the proposed acquisition of M&C Saatchi by Next Fifteen.
Next Fifteen noted that its offer is currently not expected to be approved by M&C Saatchi shareholders, given the previous statement made by shareholders AdvancedAdvT (ADV) and Vin Murria.
On August 15, 2022, ADV announced that, based on the implied value of the Next Fifteen offer at that date, ADV and Vin Murria intended to vote their respective shareholdings in M&C Saatchi against the scheme. ADV and Vin Murria, who together hold approximately 22.3% of M&C Saatchi's issued share capital, will be required by virtue of their previous statement to vote against the Next Fifteen scheme unless the implied value of the Next Fifteen offer increases above 197.3p per M&C Saatchi share, being the implied value at the time the ADV statement was made.
On June 9, 2022, Next Fifteen had confirmed that its agreed bid for M&C Saatchi was final and would not be raised. M&C Saatchi shareholders are being offered 0.1637 of a Next Fifteen share and 40p in cash, which then equated to approximately 247.2p per share. At Next Fifteen's current share price of 847p, the offer values each M&C Saatchi share at around 179p, with the target company's stock currently trading at 137.50p
On May 20, the M&C board accepted Next Fifteen’s takeover bid, which at the time amounted to around £310mln, after rejecting ADV's offer a week earlier. Gareth Davis, chair of M&C Saatchi, said at the time: “The M&C Saatchi independent directors all consider Next Fifteen's offer to be far superior to the offer announced earlier this week by ADV, and a clear repudiation of ADV's response statement that it strongly disagreed its bid undervalued M&C Saatchi.”
In a statement today, Next Fifteen said: "While this would be a disappointing outcome and the board of Next 15 continues to believe in the benefits which a combination of Next 15 and M&C Saatchi could deliver, the board will always maintain pricing discipline when pursuing its M&A strategy which may result in certain transactions not proceeding."
The marketing group added: "The board remains highly confident in the Next 15 Group's future prospects. As noted in the Next 15 Group's interim results on 26 September 2022, strong trading in H1 has continued into the third quarter of our financial year, with results for the full financial year expected to be at least in line with management expectations. The scale and strength of our US business, combined with recently announced new client wins, give us confidence for further growth in the next financial year."
"The board believes that Next 15 is well positioned to continue to generate shareholder value through its strategy of organic growth complemented by M&A and the Next 15 Group's strong balance sheet provides scope for further investments both in its existing businesses and in M&A to accelerate our longer-term growth," Next Fifteen's statement concluded.