M&C Saatchi rocked by stock price waves

Are M&C Saatchi executives enjoying the sunshine – and the plethora of Grands Prix – at Cannes? Maybe they are, but the agency is rocked on rougher seas as the founders of Next15’s agreed takeover bid – it’s now down to £233m from £310m pounds as its share price crashes – and Saatchi’s board withdraws (some) of its support.

Meanwhile, entrepreneur and former vice-chairman of M&C, Vin Murria’s ADV bid – originally £254m – now looks higher. M&C – its shares have also fallen as financial markets face a perfect storm – is currently valued at just under £200million.

M&C says its outlook is better on its own than with ADV (although it’s still open to a deal with Next15.) But its recent upbeat earnings projections came before the aforementioned markets turned sour with the ever-growing prospect of a recession in at least some of M&C’s territories, notably its main one, the UK. The UK’s so-called ‘Brexit dividend’ is coming and it’s bad: trade has been hit hard and business investment has more or less dried up, except for US-based bargain hunters trying to pounce on undervalued UK companies. Could so-and-so get M&C out of its misery?

By the way, although this is an important question, what exactly do 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 driver, as Murria hopes, of digital advertising power?

As for Next15, it has already bought Engine creative, which gives it some clout in the UK if it can keep senior executives from shipping (by no means a certainty.) Its shareholders certainly don’t seem not convinced of the merits of M&C’s offer.