Oddly, this week’s half-year figures from Cordiant were greeted with a share price hike. Oddly because Cordiant chief executive Michael Bungey had little to offer but gloomy prognostications and the announcement of more redundancies. Presumably investors were relieved the figures were not worse. Whether Tempus – Chris Ingram’s media specialist group, currently embroiled in a highly sensitive takeover – would get such an easy ride were its own to be announced in the next month or so is another matter. One thing, however, is reasonably sure. Whatever might be contained in that statement – the gist of which is already known to a few senior Tempus executives, but to them alone – could materially affect the company’s fate. But will the figures ever reach the light of day?
Not, it is tempting to say, if Ingram has his way. He must be hoping to close, as painlessly as possible, a cash deal with Havas Advertising, valuing his company at a handsome £450m, or 541p a share, before the interim figures deadline passes. This is such a good offer it is almost unbelievable, bearing in mind that Tempus was trading at about 360p before the bid.
Why the premium? Havas’ Alain de Pouzilhac is a man in a hurry. As architect of Havas’ global expansion policy, he knows the consolidation game is coming to a close. Tempus is one of the few quality companies still available. Its acquisition would catapult Havas from fifth to fourth position in the world, and plug the gap in MPG, Havas’ media operation. He knows, too, that to keep other predators away he needs a knockout offer.
But is it? Tempus’ share price, hovering comfortably above the bid price, says no. As far as is known, there are only two other possible contenders: Aegis, owner of media independent Carat; and WPP. Aegis never seemed that enthusiastic, and has tried to distance itself from any Tempus bid. So all eyes are on Sir Martin Sorrell at WPP, who would dearly like to get his hands on the Tempus operation after stalking it for so many years. His is an interesting dilemma.
Admittedly, Tempus would go well with WPP’s Media Edge operation – and is known to have had talks when Media Edge was still owned by Young & Rubicam. Then again, as it already owns 22 per cent of Tempus, WPP can offer up to £6 a share and still pay less than Havas for the company. But Sorrell has doubts about Tempus’ performance in a deteriorating market, doubts which ironically could be allayed by an insight into its current, or near-current, trading conditions. As he’s not a Tempus board director, that’s not an insight he can enjoy.
What the crystal ball does reveal is that one of Tempus’ top five clients – Shell – is up for review, and that Tempus is not tipped to keep the business. Whichever way the pitch goes, it is unlikely to deter Havas. For WPP, on the other hand, the Shell account is one of a number of imponderables that must be weighed before launching a counter-bid. Most importantly, Sorrell would want assurances that key Tempus staff would not defect – no easy task in view of the bad blood between the two organisations. Will he or won’t he? The smart money, at the moment, suggests that he will. The clue lies in what added value WPP can offer Tempus, compared with Havas.