WPP is waiting for a decision from City regulator the Takeover Panel as to whether it can pull out of the deal after invoking the "adverse material change" clause following the terrorist attacks in the US.
It seen as unlikely that the Takeover Panel will back WPP's bid to exit the deal. If, as expected, this happens it is thought unlikely that Sir Martin Sorrell, the WPP CEO, will risk a damaging legal battle with Tempus shareholders.
However, the situation could change as WPP considers it has a strong legal case. With its use of adverse material change, WPP is arguing that the situation has changed significantly following the dramatic fall in world markets after the events of September 11.
For this to succeed, Tempus's profits will have to have slumped by at least 20%, but analysts believe that, at worst, the CIA-owning firm will be down by around 10%. This will not be enough to convince the Takeover Panel to let WPP out of its £432m offer to buy the company.
WPP has already asked to see Tempus's books to clarify the situation. However, Tempus refused to hand over recent trading information, saying it can not give sensitive data to WPP, still a rival company. Tempus may however, hand this data to the Takeover Panel to help it make its decision.
WPP's use of the clause is seen to have been weakened by its purchase of a further 3% of Tempus stock after September 11. This raised its stake in Tempus from the 22% it bought earlier this year to 26%.
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