Tempus notified the London Stock Exchange today that it had set out its arguments in a formal submission Tuesday to the panel.
WPP announced Oct. 10 that it had petitioned the panel to let it exit its bid. On the basis of the submission made by WPP, which Tempus has been permitted to see, Tempus' board "is firmly of the view that there are no grounds for allowing the material adverse change condition to be invoked," the company said in a statement.
WPP is arguing that deteriorating world economic conditions are changing the prospects of Tempus, allowing it to revoke its original offer, which values the group at $639 million.
Backing out of a bid is not easy.
Material adverse change escape clauses are standard, but they are usually invoked when the bidder hasn't persuaded enough shareholders to accept a bid. In WPP's case, 93% of Tempus shareholders have accepted its offer of 555 pence per share.
Probably within the next week, an executive panel will announce its ruling and give the losing side a time frame in which to appeal.
Any appeal will be made to the panel. Hearings before the panel are informal and don't resemble structured courtroom proceedings. The hearings usually involve senior executives of the relevant companies and their legal and takeover advisers. A quorum for a hearing is five, including the panel chairman.
The hearings are usually held in private unless the panel chairman decides otherwise. The body will provide its decision in writing to the parties "as soon as practicable following a hearing."