WPP Wants Out of Tempus Bid

LOS ANGELES–WPP Group made official its desire to back out of its bid to acquire Tempus Group today, sources said, and attempted to invoke a clause that, under British finance law, would allow WPP to withdraw its bid. Since WPP made its offer in August, Tempus shares have fallen by about 10 percent.

The WPP submitted a document to the Takeover Panel, a body of investment bankers and other financial executives that oversees public-company takeovers in Britain. The document stated “it is the unanimous view of the WPP board that there has been a material adverse change in the prospects of the Tempus Group following the announcement of WPP’s offer and, in particular, following the terrorist attacks in the United States on 11 September 2001.”

The material adverse condition clause has been invoked at least once in the past but is “fairly unprecedented,” said one source. Still, “the world has changed,” the source added, “and if this doesn’t constitute a material adverse change, I don’t know what does.” Another source noted that Havas withdrew its offer of $619 million last month at least in part for similar reasons, but didn’t need to invoke the material conditions clause to back out “because they hadn’t gotten 90 percent acceptances” from the Tempus board, which WPP has received.

Nevertheless, analysts are divided over whether or not the executive committee of the Takeover Panel will approve WPP’s bid. Earlier this week, Credit Suisse-First Boston suggested that the panel would not agree with WPP’s position. The executive committee of the panel, which is expected to rule within two weeks, must now recommend to the full panel whether or not to let WPP’s offer lapse. Both WPP and Tempus would have the right to appeal the executive committee’s recommendation to the panel.