NEW YORK -- Citing deteriorating market conditions due to the ad recession and the devastating impact of the terrorist attack last week in New York, French holding company Havas is ending its quest to purchase UK-based media services network Tempus, allowing a clear path for a takeover by Britain's WPP Group.
Havas, which owns Media Planning Group, retracted its attempt to extend the period for Tempus shareholders to accept its $610 million bid for Tempus, and, in the process, declined to raise WPP's $629 million counterbid. Havas will let its bid lapse on Monday, September 24.
"It's all over; by the end of the year CIA and Tempus will be owned by WPP," a source said, speaking of Tempus's CIA Medianetwork, the company's media buying and planning agency.
Still, in retreating from the bidding war, Alain de Pouzilhac, Havas' chief executive, cautioned his rival WPP CEO Martin Sorrell that he might be paying too much, given the declining economy. Plus, European investors appear to be skeptical that WPP will follow through on its bid, with some observers noting that WPP will need to get 90 percent of the shareholders acceptances it needs by the October 1st deadline. As evidence of investors? suspicions, Tempus shares were down 17 percent on the London stock exchange, a source noted.
WPP already has a 22 percent stake in Tempus and has been planning to add it to its media buying empire, which includes MindShare and The Media Edge.
WPP would add CIA to its developing media-agency holding company, tentatively called GME (Global MindShareEdge), which would have billings of more than $30 billion. Under that scenario, sources said, Tempus founder Chris Ingram and TME global chairman Beth Gordon would co-chair GME, MindShare CEO Irwin Gotlieb would take the CEO chair at GME, and Mainardo de Nardis, CIA CEO, would helm TME/CIA, sources said. Ingram though is said to dislike the idea of working with Sorrell and would likely resign, sources said.
WPP and Tempus officials were unavailable for comment.