This morning, WPP shares were up 2.9% at 556.5p, having closed last night at 541p. WPP saw its shares climb as high as 570p yesterday after it first announced it was seeking a way out of the Tempus deal. As recently as October 5, WPP's shares have been trading as low as 470p a share.
There is some expectation among shareholders that WPP might be able to get out of the deal to buy media-buying firm Tempus. However, many analysts expect WPP will have a hard time convincing the Takeover Panel of the merits of its argument.
Tempus saw its stock fall after having held steady at 490p for some time. Its shares were down 7.2% to 452.5p yesterday before closing at 465p, remaining unchanged this morning.
Yesterday, WPP said that while its board remains convinced of the strategic virtues of the deal, it was the unanimous view of the board that there has been a material adverse change in the prospects of the Tempus Group following its offer and, in particular, following the terrorist attacks in the US.
Commentators believe it is unlikely that the Takeover Panel will accept WPP's arguments that material adverse change has taken place. For this to be true, Tempus's profits would have to have fallen by around 20%. Profits at Tempus are believed to have fallen, but had they fallen by as much as 20% the company would have had to have issued a warning by now.
WPP's case is also likely to be hindered by the fact that it bought Tempus shares after September 11 as it moved to increase its stake from 22% to 26%.
Earlier this week, it was reported that WPP CEO Sir Martin Sorrell was turned down by Tempus when he asked to see the last two months' worth of Tempus financial data to help decide whether to seek a way out of its 555p-a share bid for the CIA-owning firm.
French group Havas Advertising withdrew its offer as share prices collapsed on September 21 after the terror attacks in America. Its withdrawal left WPP's offer as the only one on the table.
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