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* Second approach from Murria rejected
* M&C says offer significantly undervalues firm
(Adds M&C statement)
LONDON, Jan 24 (Reuters) - Advertising group M&C Saatchi
has rejected an improved takeover approach from the
acquisition vehicle of its top shareholder Vin Murria, saying on
Monday it still significantly undervalued its prospects.
Murria's AdvancedAdvT said on Monday it had floated
two options, one an all-share offer that values each M&C share
at around 220 pence or an alternative structure that includes
some cash and values them at around 200 pence.
It said the paper offer represented a 20.7% increase on its
previous proposal, but that the agency's independent directors
rejected it late on Sunday. The 220 pence price - valuing M&C
Saatchi at about 270 million pounds ($364 million)- is based on
the AdvancedAdvT stock price when it was halted from trading.
M&C shares were up 2.5% at 179.5 pence in morning trading,
before falling following the M&C statement.
AdvancedAdvT, the vehicle of the software entrepreneur
Murria that is also backed by private equity group Marwyn, has
said it would combine its digital capabilities with the brand
recognition of M&C, and invest heavily to help it better
compete, including with acquisitions.
Founded in 1995 by ad mogul brothers Maurice and Charles
Saatchi, M&C has been recovering from a 2019 accounting scandal
and argues the offer does not reflect its expected future
growth. It has said it sees little merit in a deal that does not
offer its shareholders a full premium.
It said on Monday it had not seen any details about possible
takeovers, and there was no guarantee this strategy would work.
It also noted that major corporate change can unsettle key
staff, a fundamental issue for a services company.
Murria is M&C's deputy chairman and biggest investor. She
owns 12.5% of M&C directly, while AdvancedAdvT owns 9.8%.
In Monday's statement, AdvancedAdvT said it would want to
keep Saatchi's Moray MacLennan as CEO, with AdvancedAdvT's Gavin
Hugill as chief operating officer. Vin Murria would act as
chairperson with a majority of independent directors.
M&C Saatchi in a trading update on Friday lifted its 2021
headline profit before tax outlook, and said a regulatory
investigation into the group's accounting had closed without any
enforcement action.
Analysts at Peel Hunt said with the group's recent strong
trading and the closure of the investigation it believed a
further improved offer would be required. AdvancedAdvT has until
Feb 3 to provide a formal offer, they said.
($1 = 0.7418 pounds)
(Reporting by Emma-Victoria Farr and Kate Holton
Editing by Jason Neely and Mark Potter)
