The news could mean that an all-cash bid for Tempus may be imminent. Speculation is WPP will launch a bid in the region of £450m. This would see WPP pay between 550 and 555p per share.
News of the confirmed talks pushed Tempus shares to their highest price to date, as they broke through the 600p barrier this morning before dipping back down to last night's close of 590p. Tempus shares have now risen more than 60% since Havas made its July 19 bid of £425m.
WPP would find itself paying considerably more than the 541p cash-and-share bid made by Havas. However, WPP already owns 22% of the company, which it bought earlier this year at an average price of 200p a share.
In a statement, Tempus said, "In response to recent press speculation and the movement in its share price, the board of Tempus Group confirms that, following an approach from WPP Group, it is in discussions with WPP about a possible cash offer for the entire issued and to-be-issued share capital of Tempus not already owned by WPP."
The statement from Tempus follows yesterday's complaint by Havas's financial advisers to the UK Takeover Panel demanding that WPP Group be forced to make clear its intentions concerning a possible counter-bid for Tempus. The complaint to the takeover panel was made by investment bank JP Morgan, which is advising French company Havas on the deal.
The complaint followed reports yesterday morning that WPP CEO Sir Martin Sorrell is close to deciding to move ahead with a bid for Tempus.