The Attempted Takeover of M&C Saatchi Described as 'Unusual'

The bid to takeover M&C Saatchi by its director and deputy chair Vindoka 'Vin' Murria through her acquisition company AdvancedAdvT Limited (AdvT) has been described as an "unusual" situation, with shareholders said to be unimpressed by the move. Murria, who previously founded and was CEO of Advanced Computer Software Group plc, was appointed to the board of M&C in March 2021, having purchased 12.5% of the agency’s shares following its accounting scandal the year before. On January 5, AdvT confirmed that it had acquired 12 million shares in M&C Saatchi as it began to implement a reverse takeover. It explained that it aimed to explore a merger, claiming it would enable the enlarged group to “to capitalize on the heightened opportunity to 'navigate, create and lead meaningful change' whilst guiding companies on their new digital journey.” M&C Saatchi Advertising L.A. Ceases Operations Due to COVID-19 Impact The agency, which is listed on the London-stock market, confirmed on January 6 that a “share exchange merger” between the two companies was being proposed. It then released a follow-up statement on January 8, in which it stated that its independent directors' initial opinion of the all-share proposal did not “articulate an alternative strategy for the benefit of the Company’s stakeholders beyond an initial change of control.” The statement also said that the proposal “does not reflect the value of the business and its future prospects.” Analyzing the situation, Tony Walford, a partner at merger and acquisition consultancy Green Square, which specializes in creative agency deals, told Adweek that it was “unusual” to see a new deputy chair making a bid for control using only stock in a company. “On the back of only recently recovering from the accounting issues, this clearly hasn’t landed well with the board,” Walford continued. “You can’t argue with the logic that M&C needs to quickly play catch up in adding data and digital capabilities—and M&A is the fastest route to achieving this—but the deal being purely share-based doesn’t return any immediate cash for shareholders.” Two years after its accounting scandal that shook up the leadership within the business, 2021 saw M&C begin a strategy that improved its trading while bringing in clients such as Apple, Mars, Tinder, Google and Uber, as well as winning new work with existing clients such as the U.K. Government, PepsiCo, TikTok, the Commonwealth Bank, Reckitt and Lexus. Reporting its half-year results ending June 30, the company revealed gross revenue was up by 14.7% year over year, while its headline profit had increased by 10.5%. In its last trading update for its final quarter, M&C Saatchi claimed that activity during the period had been “strong,” particularly around performance media and global and social issue divisions, as well as in the U.K. “If Murria succeeds in her offer, it will be a very different M&C that emerges as part of the combine,” Walford suggested, adding that the attempt will be “a shot in the arm” for the business in terms of adding to its capabilities, even if Murria fails in her takeover attempt. ‘You Ain’t Seen Nothing Yet’: S4 Capital’s Sir Martin Sorrell on Digital Growth