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M&C Saatchi tossed around on share price waves

Are M&C Saatchi executives enjoying the sun – and the plethora of Grand Prix – in Cannes? Maybe they are but the agency is being tossed around on more stormy seas as Next15’s agreed takeover bid founders – it’s now down to £233m from £310m as its share price tanks – and the Saatchi board withdraws (some of) its support.

Meanwhile entrepreneur, and former M&C deputy chair, Vin Murria’s ADV bid – originally £254m – now looks higher. M&C – its shares have fallen too as financial markets face a perfect storm – is currently valued at just below £200m.

M&C says its prospects are better on its own than with ADV (although it’s still open to a deal with Next15.) But its recent optimistic earnings projections came before the aforementioned markets turned sour with the ever-growing prospect of recession in at least some of M&C’s territories, most notably its main one the UK. The UK’s so-called “Brexit dividend” is arriving and it’s bad: trade has been hit hard and business investment has more or less dried up, aside from US-based bargain hunters trying to pounce on undervalued British companies. Might one such put M&C out of its misery?

As an aside, although it’s an important one, what exactly do the bidders see in M&C? Yes it’s still a big name and it has global reach via a somewhat rickety network. But is it really the potential engine, as Murria hopes, for a digital advertising powerhouse?

As for Next15 it has already bought Engine creative, which gives it some heft in the UK if it can stop senior executives shipping out (by no means a certainty.) Its shareholders certainly seem unpersuaded about the merits of the M&C bid.

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