WPP Will Not Bid For Aegis

Ending months of anticipation, the WPP Group announced today that it has 'no intention' of making a bid for Aegis, owner of MR firm Synovate. The company stated that it made indicative offers to the Aegis board last week, but that Aegis did not wish to pursue them.

The Takeover Panel had set a deadline of noon today for WPP and its US private equity partner Hellman & Friedman to submit an offer.

In a statement made just within the deadline, WPP said: 'An indicative proposal was submitted to the board of Aegis on 16 November 2005 by WPP and affiliated funds of Hellman & Friedman. The proposal outlined alternative all-cash offers, one by WPP and H&F, and one by WPP, H&F and, possibly, one other party. WPP has since been informed that the board of Aegis does not wish to pursue either alternative. Accordingly, WPP announces that it has no intention to make an offer for Aegis.'

Aegis became the subject of bid scrutiny in August, when Havas Chair Vincent Bollore began to increase his stock in the company. In September, French Publicis Groupe made a bid for Aegis, but withdrew the following month. Rumours about WPP's interest in Aegis began soon afterwards.

This afternoon, Aegis announced that it 'welcomes an end to the uncertainty caused by the recent approaches'. It stated that WPP and Hellman & Friedman had presented Aegis with an indicative proposal 'at a price materially below 140p, the price in the indicative proposal made by Publicis. Accordingly WPP and Hellman & Friedman were informed on 16th November that their proposal did not form the basis for any continuing dialogue.'

Robert Lerwill, Chief Executive of Aegis, said today's announcement was 'not a surprise, given that WPP and Hellman & Friedman had not made a credible proposal'. He added that Aegis's strategy remains to develop its media and research businesses - as demonstrated by yesterday's announcement of the takeover of Turkish MR firm Plus REMARK (www.mrweb.com/drno/news4873.htm ).

Shares in Aegis fell this morning as the likelihood of a WPP bid faded, but Aegis said its Board 'remains confident that Aegis has the right portfolio and strategy to create significant value for all its shareholders'.

There was speculation earlier this week that WPP might make a joint bid with Bollore (www.mrweb.com/drno/news4854.htm ), although Aegis stated today that it 'was not asked to consider any proposal involving any other party'. There is still a chance that Bollore, who now owns almost 25% of Aegis, could make a separate bid for the company.

The companies are online at www.wpp.com , www.aegisplc.com, and www.synovate.com.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.