The Takeover Panel said that it had been informed of WPP's decision. A meeting of the full panel will be held next week to hear the appeal, after the initial decision was made by the executive committee only.
The decision is likely to surprise some industry watchers, who had expected Sir Martin Sorrell, the WPP Group CEO, to abide by the ruling of the panel. It had been suggested last week that WPP, knowing the likely outcome, was resigned to going ahead.
However, WPP is under no obligation to go through with the deal on the basis of the panel's ruling, which is not legally binding. This week, Deutsche Bank said it believed WPP could swallow the deal, and put its shares on its European focus list.
WPP opened up this morning by 1.6%, to 600p, having closed last night at 590.5p.
Yesterday analysts were more concerned with the full-year outlook than the eventual outcome of the Tempus deal, and were of the view that longer term, Tempus will add value to WPP's Media Edge media-buying operation.
WPP appealed to the Takeover Panel on October 10, asking it to invoke the material adverse change condition. WPP argued that the situation had been significantly changed by the events of September 11 as world markets fell.
WPP lodged a formal submission with the panel setting out the reasons why it believed that it should be permitted to invoke the material adverse change clause. This submission was made available to Tempus and, on October 16, Tempus made its own submission arguing why it believed that there were no grounds for allowing WPP to invoke the clause.
Earlier this week, WPP announced that it had new information, which it was using to support its case. However, it was not enough.
The panel's decision came as WPP announced its third-quarter results and warned that it would not be able to hit its 15% operating margin objective. WPP estimated that the impact of the events of September 11 and beyond on the last three weeks of that month alone reduced revenues by at least £21m, without any opportunity to reduce operating costs.
It said if the last three months of the year were impacted in the same way, like-for-like revenues for the whole of 2001 could be down 2%. It added that third-quarter revised forecasts for the year indicate that it will be very difficult to achieve the group's operating margin objective of 15% in 2001.