M&C Saatchi PLC on Tuesday said it has rejected what it considers an ‘unsolicited hostile offer’ from AdvancedAdvT Ltd, on the grounds that it significantly undervalues the company’s business and prospects.

Under AdvancedAdvT’s most recent offer, shareholders in M&C Saatchi will for each share held either receive 2.043 new shares in the London-based acquisition vehicle and 40 pence in cash, or receive 2.530 new AdvancedAdvT shares.

Both offers value each share of M&C Saatchi at 207.5 pence and the total share capital of the London-based advertising agency at £253.6 million, based on the AdvancedAdvT’s closing price on Monday.

AdvancedAdvT has currently received irrevocable undertakings from around 40.0 million shares in M&C Saatchi, representing 33% of its equity.

However, M&C Saatchi announced its rejection of the offer, calling it ‘derisory’ and advising shareholders to reject the bid. The company claimed that the offer significant undervalues it and its future prospects, and does not recognise M&C Saatchi’s fundamental growth potential.

In early January, AdvancedAdvT had first made an offer for M&C Saatchi, offering 1.86 new AdvancedAdvT shares for one M&C Saatchi share held. Eventually in February, AdvancedAdvT increased its offer to 1.939 new AdvT shares, plus 40p in cash for each M&C Saatchi share held.

However, both of these bids were not recommended by M&C Saatchi.

‘This offer is derisory. I urge shareholders to reject this bid as it significantly undervalues the business and prospects of M&C Saatchi,’ said M&C Saatchi Chair Gareth Davis.

Shares in M&C Saatchi closed 2.1% lower at 159.60 pence, while AdvancedAdvT shares ended up 1.2% at 83.00p in London on Tuesday.

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