(Alliance News) - M&C Saatchi PLC on Friday noted the announcement from acquisition vehicle AdvancedAdvT Ltd earlier, stating that it was exploring a "share-exchange merger" with the London-based advertising agency.
Shares in M&C Saatchi were 12% lower at 184.00 pence on Friday afternoon in London.
M&C Saatchi said that its directors have received an initial non-binding indication of interest, whereby AdvancedAdvT would offer each shareholder 1.86 new AdvancedAdvT shares for one M&C Saatchi share held.
The proposal is conditional on being recommended from the directors, however the initial opinion from those directors is that it does not articulate an alternative strategy for the benefit of the company's stakeholders beyond an initial change of control.
In addition, the proposal by AdvancedAdvT does not reflect the value of the business and its future prospects.
"M&C Saatchi's current strategy has been in place since Q1 2021, and has resulted in a number of positive trading updates. Meaningful new client wins include Uber, Google, Tiktok and Tinder as well as new assignments from existing clients including the UK Government, Pepsico, Reckitt and Lexus. It is not clear to the independent directors how shareholders and other stakeholders would benefit from ownership dilution and a change in board leadership of the company," M&C Saatchi stated.
Earlier Friday, AdvancedAdvT said a merger would combine the M&C Saatchi brand and platform with its own funding and experience at mergers and acquisition. The combined company would focus on "a data, analytics and digital creative marketing strategy plus M&A", it said.
"The merger would also enable M&C to resolve the legacy put option issue as well as providing the cash to accelerate investment in the business and transformational digital led M&A," AdvancedAdvT said.
By Dayo Laniyan; dayolaniyan@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
M&C Saatchi (SAA)
Advancedadvt (ADVT)