Sorrell 'underestimating' Tempus backlash

LONDON - Shares in WPP Group continued to slide last night amid speculation that CEO Sir Martin Sorrell is considering a hostile bid for Tempus Group, owner of media-buying network CIA.

WPP stock was down 6.5% yesterday to close at 694.5p, while Havas, which is involved in a friendly takeover of Tempus, slid just 0.4%.



Analysts believe that shareholders are concerned about the damage that could result from a WPP takeover and the subsequent departure of its CEO Chris Ingram, who founded the company 27 years ago and owns 16% of the company.



Simon Lapthorne, media analyst at Old Mutual Securities, said, "Sir Martin may underestimate the backlash if he goes ahead with a takeover. Strategically, if he could buy it on a friendly basis, it would be a good move and strengthen WPP's media-buying business in Europe.



He continued, "There is also the question of how he would fund it, it's trading at a substantial premium to WPP. There is one school of thought that says he should cash in his chips and sell to Havas, take his profits from the sale [of WPP's 22% stake in Tempus] and use it for something else.



"But having staked his claim on Tempus some time ago, he might be tempted to do something unwise, to avoid being jilted," Lapthorne said.



Ingram could pocket as much as £60m. There is also concern that Ingram's departure could spark an exodus of senior management with longstanding loyalties to Ingram.



Sir Martin is expected to make his decision within the next week. Meanwhile, several agency stocks took a battering yesterday, along with WPP, as a result of continuing worries about the current market.



Cordiant nose dived 9.2% to close at 158.5p, Aegis fell 4% to 101.25p and Tempus fell 3% to 580p in London. Publicis Groupe slid 2.3% to close at $25.60 (£17.92) in New York.



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Claire Billings, recommends

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