|WPP Group vs. Havas
WPP's offer values Tempus at $629 million and is a 54% premium to the Tempus share price of $5.22 on July 18, the day before Havas announced that Tempus management had agreed to its offer of $7.84 per share.
Talking with both bidders
In response to WPP's offer today, Tempus said it will hold discussions with each bidder and withdrew its recommendation to its shareholders that they accept the original Havas offer.
In a statement today to the London Stock Exchange, Tempus said that it "proposes to hold discussions, through its advisers, with each of Havas Advertising and WPP in order to determine the best eventual outcome for Tempus shareholders."
In response to WPP's counteroffer, Havas said that it "is considering its position and consulting with its financial advisers. In the meantime, Havas Advertising urges Tempus shareholders not to take any action."
Explaining the reasoning for its counter-bid, WPP said today that CIA, Tempus' media planning and buying business, would enhance the Media Edge, which is part of WPP's media investment management division, thereby creating the world's fourth-largest media buying network. Tempus' branding, identity and design division would join with WPP's existing branding, identity, design and strategic marketing consultancy businesses.
WPP currently owns approximately 22% of Tempus' existing issued share capital.
'Strategic and financial benefits'
Commenting on the announcement, WPP CEO Martin Sorrell said, "We believe the strategic and financial benefits of combining CIA with the Media Edge are compelling. The two businesses are highly complementary philosophically and will create a worldwide geographically balanced network and a much enhanced client offering.
"We are also attracted by the excellent fit of Tempus' branding, identity and design division with our strategic marketing consultancies and similar businesses," he said.
The counteroffer made by WPP will be open for at least 21 days from today.
Offer to Tempus chairman
If its offer is accepted, WPP says it would invite Tempus Chairman Chris Ingram to become co-chairman of Group MindShare Edge, WPP's media investment management division.
However, Mr. Ingram has consistently said he does not want to sell out to Mr. Sorrell. Mr. Ingram owns a 16% stake in Tempus and is the largest shareholder. Other Tempus executives hold an additional 9%.
Havas has received "irrevocable undertakings" to accept the offer from the directors of Tempus for 18.8 million shares or around 25% of Tempus' issued share capital, which stood at 73,157,006 shares as of Dec. 31, 2000. If a higher offer came along, however, Tempus directors would be obliged to recommend it to shareholders.
Pressure on de Pouzilhac
Havas Chairman-CEO Alain de Pouzilhac will be under pressure to counter any offer by WPP. Currently, Havas has the weakest media specialist offering of the world's big communications holding companies. Only recently did it take full control of Spanish-based media specialist Media Planning Group.