NEW YORK--British holding company Tempus has submitted a formal rebuttal to rival UK holding company WPP Group regarding its attempt to withdraw its offer to buy Tempus by citing material adverse changes in Tempus' value.
The rebuttal was submitted today to the Takeover Panel, the official body governing mergers and acquisitions in Britain.
WPP appears to be looking for a way out of its $629 million cash offer for Tempus, which was made back in August, since its stock price began to diminish after the events of September 11. British takeover rules allow a company to rescind an acquisition offer if it discovers a "material adverse change" in the value of the company it's been intending to buy, sources said.
In its rebuttal, Tempus is arguing that any changes in its value are the result of a larger economic and industry-wide downturn, rather than a specific defect in the company's finances. Sources said that the Takeover Panel has never granted a MAC challenge due to general economic effects on a company's worth.
WPP's offer for Tempus is extended until October 22, at which time it can decide whether to go through with the purchase or seek more time, unless the Takeover Panel rules on the invocation of the MAC clause. Either side can then appeal the panel's decision, sources said.