NEW YORK--The UK Takeover Panel today rejected British holding company WPP's attempt to maneuver out of its $629 million takeover of British media services network Tempus Group. WPP had citied "material adverse changes" in the value of Tempus after the September 11 terrorist attacks
Also on Thursday, WPP reported that it might not be able to reach its 15 percent operating margins because of the devastating economic impact resulting from the attacks, a WPP representative said. Nevertheless, WPP was able to chart 41 percent revenue growth for the third quarter, thanks mainly to the balance sheet successes of Young & Rubicam, which WPP purchased last year.
The UK Takeover Panel, a non-statutory governing body that was established by the London business community to settle disputes regarding mergers and acquisitions, said in statement that it had considered the submissions of both Tempus and WPP.
While a representative for the Panel, declined to cite reasons for the its decision not to accept WPP's argument, sources say that the fact that WPP continued to buy shares of Tempus after September 11 seemed to undercut attempts to pullout. WPP bought three more shares of Tempus--it now has 25 shares of the company--when it was battling rival French holding company Havas for a takeover of Tempus. Havas let its $610 million offer for Tempus lapse when it couldn't match WPP's counter offer.
WPP may decide by the end of business today whether to appeal the decision to the panel's executive committee. Philip Remnant is the panel's director general and is employed by Credit Suisse First Boston in London.