NEW YORK -- WPP Group is appealing the UK Takeover Panel's decision today, which rejected WPP's attempt to abort its acquisition of Tempus Group.
The Takeover Panel's ruling committee denied WPP's invocation of the "material adverse changes" clause in its move to rescind the $629 million bid for Tempus, the UK-based parent of CIA Medianetwork. The panel offered no public explanation for its decision, although a representative said that WPP had in fact filed an appeal to the panel's executive committee. The committee would meet to decide the appeal next week, the representative added.
WPP CEO Martin Sorrell said that he had indeed filed an appeal with the panel, but declined to comment further.
A Tempus representative said that its board of directors has been "firm in its view that there are no grounds for allowing the MAC condition to be invoked. We remain confident of that position."
Earlier this week, WPP said that it had found "new information" bolstering its view that Tempus's value had changed so dramatically after the terrorist attacks of September 11, that a MAC condition did exist. While WPP wouldn't publicly divulge what this information was, sources said had to do with Tempus's year-end profits being lower than expected. Tempus officials denied that was the case.
Also on Thursday, WPP released its third quarter earnings report. While noting that revenues were up 56 percent for the first nine months of 2001, and up 41 percent for the third quarter -- with much credit given to the balance sheet successes of recently acquired Young & Rubicam -- the company also reported that it would have difficulty meeting its 2001 operating margins. A company representative attributed missed numbers to losses emanating from the terrorist strikes in September.
David Kaplan