M&C Saatchi has abruptly removed its biggest shareholder Vin Murria from its board after the advertising group rejected her hostile takeover bid and agreed to an offer from Next Fifteen.
M&C, a company founded by the Saatchi brothers and known for its work with the Conservative party, has for several months been locked in a fraught battle over its future with Murria, a serial tech entrepreneur with effective control over 22.3 per cent of M&C shares.
The London-based advertising group last month agreed a takeover by Next Fifteen, a larger communications and marketing company, estimated to be worth £310mn in cash and shares at the point the offer was made.
M&C independent directors opted for Next Fifteen over what it described as a “derisory” and hostile £254mn offer from Murria’s AdvancedAdvT [ADV] investment vehicle.
Given the offers for the company, M&C said on Monday it was “not appropriate” for Murria to remain on the board and removed her “with immediate effect”. It added that no resolution for Murria’s re-election would be presented at the company’s annual general meeting. Murria declined to comment on the decision.
The agreement with Next Fifteen has not quelled the battle for the company, as the M&C board and its chair Gareth Davis, a former Imperial Tobacco chief executive, still face the challenge of steering the deal through against opposition from Murria.
In total Murria effectively controls more than 22 per cent of voting shares through a personal stake of about 12.5 per cent and that of her investment vehicle ADV.
The Next Fifteen offer represented a 50 per cent premium on M&C’s share price of 165p on the day of the offer. M&C shareholders would be entitled to 40p in cash and 0.16 new Next Fifteen shares.
But since then, shares in Next Fifteen have fallen more than 13 per cent, significantly closing the gap in value between its recommended takeover bid and Murria’s offer.
ADV has said it will not increase its offer for M&C in light of the move by Next Fifteen, which it described as a “credible buyer”. But it argued Next Fifteen’s offer did not “reflect the value of foregoing control and the significant synergies available”.
On Monday M&C shares were trading at around 195p, well below the Next Fifteen offer value worth 247.2p per share and ADV’s all-share offer of 221.4p per share.
ADV on Monday called on the M&C board to clarify the basis for assessing the offers, arguing Next Fifteen’s takeover bid, using its June 1 share price, had now fallen in value to 220.1p per M&C share.
The takeover battle for M&C caps a turbulent period for the company, which was rocked by an accounting scandal in 2019 but has steadied performance under new management.
Murria built her stake when M&C’s share price had been beaten down by the affair and before its original founders had handed over the reins of the company to a long-serving deputy, Moray MacLennan.