Britain's Takeover Panel informed the London Stock Exchange today that it had dismissed WPP's appeal that would have allowed the world's No. 2 advertising group to invoke a "material adverse change" condition so that it could withdraw its offer for Tempus.
WPP is arguing that Tempus' business prospects are diminished due to the world economic effects of the Sept. 11 terrorist attacks.
WPP can continue
If that appeal fails, the next step would be for WPP to seek a judicial review, although the courts rarely reverse decisions taken by the Takeover Panel.
The Takeover Panel is the non-statutory body that administers the City Code of Takeovers and Mergers. Although neither the panel's decisions nor the code it administers have the force of law, both are fully backed in practice by the relevant government and regulatory authorities.
Because the Takeover Panel heads a self-regulatory system made up of varied city professions, a company could flaunt its decision, but such a drastic action could come back to haunt a company in future takeovers and mergers.
Ali Qassim contributed to this report.