RNS Number:7189I
WPP Group PLC
20 August 2001
PART 1
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA OR
JAPAN
WPP GROUP PLC
CASH OFFER FOR TEMPUS GROUP PLC
The board of WPP announces the terms of a cash offer for Tempus.
The Offer will be 555p in cash for each Tempus Share, valuing the entire
issued, and to be issued, share capital of Tempus at approximately #437
million. A Loan Note Alternative will also be made available.
The Offer represents a premium of:
* 14p to the cash value of the Havas Offer of 541p per Tempus Share; and
* 54 per cent. to the Closing Price of 360.5p per Tempus Share on 18 July
2001, the last Business Day prior to the announcement of the Havas Offer
for Tempus.
CIA, Tempus' media planning and buying business, will enhance The Media Edge,
part of WPP's media investment management division, creating the world's
fourth largest media buying network. Tempus' branding, identity and design
division will join with WPP's existing branding, identity, design and
strategic marketing consultancy businesses.
Upon completion of the Offer, Chris Ingram, Chairman of Tempus, will be
invited to become Co-Chairman of Group MindShare Edge ("GME"), WPP's media
investment management division.
WPP currently owns approximately 22 per cent. of Tempus' existing issued share
capital, having acquired this shareholding at an average price of 240p per
Tempus Share. Following completion of the Offer, and after taking into account
options that become exercisable, WPP's average cost per Tempus Share will be
450p and its total cost of investment will be approximately #385 million.
The board of WPP has identified synergies of at least #13 million and expects
the transaction to be earnings enhancing in the first full financial year
following completion of the Acquisition.*
Merrill Lynch and Goldman Sachs are acting as financial advisers, and Merrill
Lynch is acting as corporate broker, to WPP.
Commenting on the announcement, Sir Martin Sorrell, Group Chief Executive of
WPP, 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.
We anticipate substantial synergies to be generated from this combination.
This, coupled with our blended acquisition price of 450p per share, will
enable us to generate an attractive return for our shareholders."
This summary should be read in conjunction with the full text of the attached
announcement.
*This statement should not be interpreted as meaning that the earnings per
share of WPP, following the Acquisition, will necessarily exceed those for the
year ended 31 December 2000.
Enquiries:
There will be a presentation to analysts at 9.30 a.m. today at Buchanan
Communications, 107 Cheapside, London EC2V 6DN. For further information
contact:
WPP Telephone: +44 20 7408 2204
Sir Martin Sorrell, Group Chief Executive
Paul Richardson, Group Finance Director
Feona McEwan, Group Communications Director
MERRILL LYNCH Telephone: +44 20 7628 1000
Philip Yates, Managing Director
Richard Taylor, Director
Tim Pratelli, Director
GOLDMAN SACHS Telephone: +44 20 7774 1000
Richard Campbell-Breeden, Managing Director
James Del Favero, Managing Director
BUCHANAN COMMUNICATIONS Telephone: +44 20 7466 5000
Richard Oldworth, Managing Director
Mark Edwards, Director
This press announcement does not constitute an offer or invitation to purchase
any securities or a solicitation or an offer to buy any securities, pursuant
to the Offer or otherwise.
The availability of the Offer to persons not resident in the United Kingdom
may be affected by the laws of the relevant jurisdictions in which they are
located. Persons who are not resident in the United Kingdom should inform
themselves about, and observe, any applicable requirements.
The Offer will not be made, directly or indirectly, in or into Australia,
Canada or Japan. Accordingly, copies of this announcement are not being, and
must not be, mailed or otherwise distributed or sent in or into or from
Australia, Canada or Japan and doing so may invalidate any purported
acceptance of the Offer.
The Loan Notes have not been and will not be registered under the US
Securities Act, or the securities laws of any state of the United States, or
under the relevant securities laws of Australia, Canada or Japan. Accordingly,
the Loan Notes may not be offered, sold or delivered, directly or indirectly,
in or into Australia, Canada, Japan or the United States except pursuant to
exemptions from the applicable requirements of such jurisdictions.
Merrill Lynch and Goldman Sachs, both of which are regulated in the United
Kingdom by the Securities and Futures Authority Limited, are acting
exclusively for WPP in connection with the Offer and for no one else and will
not be responsible to anyone other than WPP for providing the protections
afforded to customers of both Merrill Lynch and Goldman Sachs or for providing
advice in relation to the Offer.
US persons who are shareholders of Tempus should note that the Offer is made
for the securities of a non-US company. The Offer is subject to disclosure
requirements that are different from those of the United States. Financial
statements included or referred to in the Offer Document, if any, have been
prepared in accordance with non-US accounting standards that may not be
comparable to the financial statements of US companies.
US shareholders of Tempus should also note that it may be difficult for them
to enforce their rights and any claim they may have arising under the US
federal securities laws, since WPP is located in a non-US country, and some or
all of its officers and directors may be residents of a non-US country. Such
shareholders may not be able to sue WPP or its officers and directors in a
non-US court for violations of US securities laws. It may be difficult to
compel a non-US company and its affiliates to subject themselves to a US
court's judgement.
Tempus Shareholders should be aware that WPP may purchase Tempus Shares
otherwise than under the Offer, such as in the open market or privately
negotiated purchases.
This press announcement contains certain "forward-looking statements" within
the meaning of Section 21E of the US Securities Exchange Act of 1934 and the
US Private Securities Litigation Reform Act of 1995. Forward-looking
statements relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and similar expressions concerning
matters that are not historical facts. These forward-looking statements
reflect WPP's current views about future events and are subject to risks,
uncertainties, assumptions and changes in circumstances that may cause WPP's
actual results to differ significantly from those expressed in any
forward-looking statement. Certain factors that could cause actual results to
differ materially from expected results include delays in completing the
Offer, difficulties in integrating the Tempus Group into WPP's operations, and
changes in global economic, business, competitive market and regulatory
factors. For more information regarding risk factors relevant to WPP, please
see WPP filings with the US Securities and Exchange Commission, including its
most recent annual report on Form 20-F. WPP does not intend, and disclaims any
duty or obligation, to update or revise any industry information or
forward-looking statements set forth in this press announcement to reflect new
information, future events or otherwise.
END
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA OR
JAPAN
WPP GROUP PLC
CASH OFFER FOR TEMPUS GROUP PLC
1. Introduction
The board of WPP announces the terms of a cash offer for the entire
issued, and to be issued, share capital of Tempus not already owned by WPP
or any of its subsidiaries. The Offer is to be made by Merrill Lynch and
Goldman Sachs on behalf of WPP.
The Offer will be 555p in cash for each Tempus Share, valuing the entire
issued, and to be issued, share capital of Tempus at approximately #437
million.
WPP currently owns 16,563,837 Tempus Shares representing approximately 22
per cent. of Tempus' existing issued share capital, having acquired this
shareholding at an average price of 240p per Tempus Share. Following
completion of the Offer, and after taking into account options that become
exercisable, WPP's average cost per Tempus Share will be 450p and its
total cost of investment will be approximately #385 million.
2. The Offer
The Offer, which will be subject to the conditions and further terms
set out in Appendix I and in the Offer Document and in the Form of
Acceptance, will be made on the following basis:
for each Tempus Share 555p in cash
The Offer represents a premium of:
+ 14p to the cash value of the Havas Offer of 541p per Tempus Share;
and
+ 54 per cent. to the Closing Price of 360.5p per Tempus Share on 18
July 2001, the last Business Day prior to the announcement of the
Havas Offer for Tempus.
The Offer will include a Loan Note Alternative, further details of
which are set out below.
The Tempus Shares will be acquired by WPP fully paid and free from
liens, equities, charges, encumbrances, rights of pre-emption and
other third party rights or interests of any nature whatsoever and
together with all rights now or hereafter attaching thereto, including
the right to receive and retain in full all dividends and other
distributions declared, made or paid on or after the date of this
announcement.
3. Background to and reasons for the Offer
The board of WPP is committed to delivering enhanced shareholder value
by continuing to be a leading player in the global advertising and
marketing services industry by providing national and multi-national
clients with comprehensive solutions to reach their customers, build
their brands, enhance their market position and develop superior
service capabilities in a cost-effective manner.
The board of WPP continues to believe that economies of scale in the
industry are critical to provide clients with competitive media buying
and to fund the research needed for leading edge optimisation and
planning tools, the enhancement of shareholder value and the
maintenance of a strong position.
Media planning, involving the selection of appropriate and effective
media, is an increasingly critical service category for global
agencies to be able to offer their clients. WPP has long recognised
the strategic benefits of developing strong independent media planning
and buying capabilities alongside its advertising agencies. The Media
Edge, part of WPP's media investment management division, is a global
media network with a client base that includes Young & Rubicam
clients, independent clients and other agencies. The merger of CIA
with The Media Edge is expected to provide:
+ an enhanced service offering for both CIA and The Media Edge
clients;
+ improved geographical profile, combining Tempus' strength in
Germany, Italy, UK, Spain, Sweden and Eastern Europe with The Media
Edge's strong position in the USA, Canada, Asia Pacific and Latin
America;
+ an opportunity to develop media planning, buying and research tools
between CIA, The Media Edge, MindShare and Kantar, WPP's information
and consultancy business; and
+ stronger purchasing power in buying media, both on a combined CIA/
The Media Edge basis and in conjunction with MindShare.
The combination of CIA and The Media Edge will create the world's
fourth largest media planning and buying network worldwide with
proforma combined annual billings in excess of #10 billion. The
combined business will rank in the top five in almost all key European
markets, eighth in the United States and in the top five in Latin
America and Asia Pacific.
The branding, identity and design division of Tempus, principally
comprising Added Value and BrownKSDP, with its strong operating
management, will take a leading role amongst WPP's existing companies
in its branding, identity, design and strategic marketing consultancy
divisions.
Following completion of the Acquisition, Chris Ingram will be invited
to become Co-Chairman of GME along with Beth Gordon, currently
Chairman of The Media Edge. David Reich will be invited to become
Vice-Chairman of GME and Irwin Gotlieb, currently Chief Executive
Officer of MindShare, will become Chief Executive Officer of GME.
Charles Courtier, currently Chief Executive Officer of The Media Edge,
will become Chairman of the combined CIA and The Media Edge business
and Mainardo de Nardis will be invited to become Chief Executive
Officer of the combined CIA and The Media Edge business.
4. Financial benefits
The board of WPP has identified synergies of at least #13 million and
expects the transaction to be earnings enhancing in the first full
financial year following completion of the Acquisition.*
These synergies are expected to be derived from a combination of head
office rationalisation, improved operational performance through raising
the margins of the combined units in the various geographic territories
and more efficient purchasing of research.
*This statement should not be interpreted as meaning that the earnings per
share of WPP, following the Acquisition, will necessarily exceed those for
the year ended 31 December 2000.
5. The Loan Note Alternative
Tempus Shareholders (excluding certain overseas shareholders) who validly
accept the Offer will be able to elect to receive Loan Notes instead of
some or all of the cash to which they would otherwise become entitled
under the terms of the Offer. The Loan Note Alternative will be available
on the following basis:
for every #1 in cash consideration #1 nominal value of Loan
Notes
The Loan Notes will be unsecured and will be issued credited as fully paid
in amounts and integral multiples of #1 nominal value. All fractional
entitlements to the Loan Notes will be disregarded. No application will be
made for the Loan Notes to be listed or dealt in or on any stock exchange
but they shall be transferable subject to certain restrictions to be set
out in the instrument constituting the Loan Notes.
The Loan Notes will carry interest at 0.5 per cent. below LIBOR. Interest
will be payable by half-yearly instalments in arrear (less any tax) on 30
June and 31 December in each year, except that the first payment of
interest will be made on the date (the "First Interest Payment Date")
which is the first 30 June or 31 December to fall on or after the date
which is six months after the first date of issue of any of the Loan
Notes. On the First Interest Payment Date, interest will be paid in
respect of the period from (and including) the first date of issue of any
of the Loan Notes to (but excluding) the First Interest Payment Date. The
Loan Notes will be redeemable in whole or in part for cash at the option
of holders on the First Interest Payment Date and subsequent interest
payment dates. In certain circumstances (to be set out in the instrument
constituting the Loan Notes), WPP will have the right to redeem all of the
Loan Notes. The final redemption date will be the fifth anniversary of the
First Interest Payment Date.
No Loan Notes will be issued unless, on or before the date on which the
Offer becomes or is declared unconditional in all respects, valid
elections have been received in respect of at least #10 million in nominal
value of Loan Notes. If insufficient elections are received, Tempus
Shareholders electing for the Loan Note Alternative will instead receive
cash in accordance with the terms of the Offer.
Subject as aforesaid, the Loan Note Alternative will remain open for
acceptance for so long as the Offer remains open for acceptance. The Loan
Note Alternative is conditional upon the Offer becoming or being declared
unconditional in all respects.
Further details of the Loan Notes will be included in the Offer Document.
6. Information on WPP
WPP is one of the world's leading communications services groups. Through
its operating companies it provides a comprehensive range of
communications services. These services include: advertising; media
investment management; information and consultancy; public relations and
public affairs; branding and identity, healthcare and specialist
communications. Operating subsidiaries include the advertising agencies
Ogilvy & Mather Worldwide, J. Walter Thompson Company and Young & Rubicam
Advertising; MindShare and The Media Edge in media investment management;
The Kantar Group in the information and consultancy sector, including
Research International and Millward Brown; the public relations and public
affairs companies Burson-Marsteller, Hill and Knowlton, Ogilvy Public
Relations Worldwide and Cohn & Wolfe; and a wide range of specialised
communications companies including Enterprise IG and Landor, specialising
in branding and corporate identity, CommonHealth and Sudler & Hennessey,
specialising in healthcare communications and OgilvyOne and Wunderman
specialising in direct marketing.
The Group employs approximately 65,000 people (including associates) in
1,300 offices in 102 countries, providing communications services to more
than 300 of the companies that comprise the Fortune 500, over half of the
companies that comprise the Nasdaq 100 and more than 30 of the companies
that comprise the Fortune e-50. Clients include The Ford Motor Company,
IBM, Unilever and American Express.
For the year ended 31 December 2000, WPP reported gross billings of #
13,949 million, revenue of #2,981 million and profit before taxation and
goodwill amortisation of #372 million. As of 17 August 2001, WPP had a
market capitalisation of approximately #7,552 million.
7. Information on Tempus
Tempus is a leading media communications group, comprising a global media
communications network, an international digital marketing agency, a
strategic marketing consultancy, a global branding, identity and design
group, a business measuring marketing effectiveness and, working with all
of these disciplines, an integrated lead agency that offers these combined
resources.
Tempus has stated that it is the third largest media buying agency in
Europe and eighth largest globally, ranked by billings.
For the year ended 31 December 2000, the Tempus Group reported gross
billings of #2,068 million, revenue of #151 million and profit before
taxation, goodwill amortisation and exceptional items of #21 million.
8. Management and employees
The existing rights of employees of Tempus, including pension rights, will
be fully safeguarded. WPP believes that the management and employees of
Tempus will benefit from the enhanced opportunities available within the
WPP Group.
9. Financing
The total cash consideration for the Offer will be financed from WPP's
existing resources and from a credit facility entered into with Barclays
Capital, Salomon Brothers International Limited and Westdeutsche
Landesbank Girozentrale, London branch, (as arrangers), Citibank
International plc (as facility agent) and certain banks and financial
institutions (as lenders).
10. Disclosure of interests in Tempus
WPP Media Holding BV and Dolphin Square Holding BV, companies which are
wholly owned by WPP, and which are presumed by the Code to be acting in
concert with WPP, together hold 16,563,837 Tempus Shares, representing
approximately 22 per cent. of Tempus' existing issued share capital. This
shareholding was acquired at an average price of 240p per Tempus Share.
Save as aforesaid, neither WPP nor, so far as WPP is aware, any party
deemed by the Panel to be acting in concert with WPP, owns or controls any
Tempus Shares or holds any options to purchase Tempus Shares or any
derivative referenced to securities of Tempus. In view of the requirement
for confidentiality, WPP has not made any enquiries in this respect of
certain parties who may be deemed by the Panel to be acting in concert
with it for the purposes of the Offer.
11. Tempus share option schemes
The Offer will (subject to compliance with any applicable local laws)
extend to any Tempus Shares issued or unconditionally allotted while the
Offer remains open for acceptance (or prior to such earlier date as WPP
may determine, not being earlier than the date on which the Offer becomes
unconditional as to acceptances or, if later, the first closing date of
the Offer), including Tempus Shares issued pursuant to the exercise of
share options granted under the Tempus share option schemes.
It is intended that appropriate proposals will be made in due course, once
the Offer has become unconditional in all respects, to holders of options
granted under the Tempus share option schemes.
12. General
The Offer will be open for at least 21 days from the date of the Offer
Document.
It is WPP's intention, following the Offer becoming or being declared
unconditional in all respects and subject to the applicable requirements
of the London Stock Exchange and the UK Listing Authority, that Tempus
should apply to the London Stock Exchange and the UK Listing Authority for
the Tempus Shares to be delisted. Delisting would significantly reduce the
liquidity of any Tempus Shares not assented to the Offer.
If WPP receives acceptances under the Offer in respect of 90 per cent. or
more of the outstanding Tempus Shares to which the Offer relates, WPP
intends to exercise its rights pursuant to the provisions of sections 428
to 430F of the Companies Act 1985 to acquire compulsorily the remaining
Tempus Shares.
This announcement does not constitute an offer or any invitation to
purchase any securities.
Appendix III contains definitions of certain terms used in this
announcement.
13. Offer documentation
Merrill Lynch, which is acting as financial adviser and corporate
broker to WPP, and Goldman Sachs, which is acting as financial adviser
to WPP, will despatch the Offer Document and the Form of Acceptance to
Tempus Shareholders in due course.
Enquiries:
There will be a presentation to analysts at 9.30 a.m. today at
Buchanan Communications, 107 Cheapside, London EC2V 6DN. For further
information contact:
WPP Telephone: +44 20 7408 2204
Sir Martin Sorrell, Group Chief Executive
Paul Richardson, Group Finance Director
Feona McEwan, Group Communications Director
MERRILL LYNCH Telephone: +44 20 7628 1000
Philip Yates, Managing Director
Richard Taylor, Director
Tim Pratelli, Director
GOLDMAN SACHS Telephone: +44 20 7774 1000
Richard Campbell-Breeden, Managing Director
James Del Favero, Managing Director
BUCHANAN COMMUNICATIONS Telephone: +44 20 7466 5000
Richard Oldworth, Managing Director
Mark Edwards, Director
This press announcement does not constitute an offer or invitation to purchase
any securities or a solicitation or an offer to buy any securities, pursuant
to the Offer or otherwise.
The availability of the Offer to persons not resident in the United Kingdom
may be affected by the laws of the relevant jurisdictions in which they are
located. Persons who are not resident in the United Kingdom should inform
themselves about, and observe, any applicable requirements.
The Offer will not be made, directly or indirectly, in or into Australia,
Canada or Japan. Accordingly, copies of this announcement are not being, and
must not be, mailed or otherwise distributed or sent in or into or from
Australia, Canada or Japan and doing so may invalidate any purported
acceptance of the Offer.
The Loan Notes have not been and will not be registered under the US
Securities Act, or the securities laws of any state of the United States, or
under the relevant securities laws of Australia, Canada or Japan. Accordingly,
the Loan Notes may not be offered, sold or delivered, directly or indirectly,
in or into Australia, Canada, Japan or the United States except pursuant to
exemptions from the applicable requirements of such jurisdictions.
Merrill Lynch and Goldman Sachs, both of which are regulated in the United
Kingdom by the Securities and Futures Authority Limited, are acting
exclusively for WPP in connection with the Offer and for no one else and will
not be responsible to anyone other than WPP for providing the protections
afforded to customers of both Merrill Lynch and Goldman Sachs or for providing
advice in relation to the Offer.
US persons who are shareholders of Tempus should note that the Offer is made
for the securities of a non-US company. The Offer is subject to disclosure
requirements that are different from those of the United States. Financial
statements included or referred to in the Offer Document, if any, have been
prepared in accordance with non-US accounting standards that may not be
comparable to the financial statements of US companies.
US shareholders of Tempus should also note that it may be difficult for them
to enforce their rights and any claim they may have arising under the US
federal securities laws, since WPP is located in a non-US country, and some or
all of its officers and directors may be residents of a non-US country. Such
shareholders may not be able to sue WPP or its officers and directors in a
non-US court for violations of US securities laws. It may be difficult to
compel a non-US company and its affiliates to subject themselves to a US
court's judgement.
Tempus Shareholders should be aware that WPP may purchase Tempus Shares
otherwise than under the Offer, such as in the open market or privately
negotiated purchases.
This press announcement contains certain "forward-looking statements" within
the meaning of Section 21E of the US Securities Exchange Act of 1934 and the
US Private Securities Litigation Reform Act of 1995. Forward-looking
statements relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and similar expressions concerning
matters that are not historical facts. These forward-looking statements
reflect WPP's current views about future events and are subject to risks,
uncertainties, assumptions and changes in circumstances that may cause WPP's
actual results to differ significantly from those expressed in any
forward-looking statement. Certain factors that could cause actual results to
differ materially from expected results include delays in completing the
Offer, difficulties in integrating the Tempus Group into WPP's operations, and
changes in global economic, business, competitive market and regulatory
factors. For more information regarding risk factors relevant to WPP, please
see WPP filings with the US Securities and Exchange Commission, including its
most recent annual report on Form 20-F. WPP does not intend, and disclaims any
duty or obligation to update or revise any industry information or
forward-looking statements set forth in this press announcement to reflect new
information, future events or otherwise.
APP
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