M&C Saatchi hides as Marwyn takeover vehicle circles

AdvancedAdvT, which is backed by UK smaller companies fund Marwyn Value Investors, is stalking advertising giant M&C Saatchi, which has already rebuffed one takeover offer.

AdvancedAdvT, an acquisition company backed by Marwyn Value Investors (MVI ), is circling advertising giant M&C Saatchi just weeks after the investment company launched its own takeover vehicle.

MVI manager Marwyn Asset Management is the largest shareholder in AdvancedAdvT, owning 15.4% of the company via its collective fund positions, having floated the special purpose acquisition company (Spac) on the London Stock Exchange in December 2020. The asset manager then raised £130m last year as it sought to snap up ‘mid-cap acquisition opportunities in the software sector’ via AdvancedAdvT.

AdvancedAdvT is run by tech entrepreneur and founder of Advanced Computer Software Vin Murria, who is also the deputy chair at M&C Saatchi. AdvancedAdvT made a significant investment in the advertising giant last week, taking a near 10% holding in the group in one swoop.

Serial entrepreneur also Murria happens to be the advertising agency’s largest shareholder, building up a 12.5% stake in the £250m company after swooping in on the shares when they hit turbulence during an accounting scandal in 2019. After continued lobbying, she was later awarded a seat on the board.

While AdvancedAdvT has not made a formal bid for M&C, an initial approach proposing an all-share reverse takeover with investors receiving 1.86 shares in the combined group for every one share owned, was rebuffed. AdvancedAdvT has until the end of February to make a formal offer.

The acquisition of M&C Saatchi would be the only asset held by AdvancedAdvT, which said a merger would provide ‘significant value’ for shareholders and ‘create an opportunity to build a data, analytics and digitally focused creative marketing business with a strong balance sheet, and additional management expertise in transforming businesses at pace, and execute on complementary M&A’.

It added that the enlarged group would be able to accelerate its growth strategy and be ‘increasingly relevant to its customers’, including taking advantage of the fast pace of digitalisation.

However, M&C Saatchi said the takeover bid was for ‘corporate governance reasons’ and would not benefit shareholders as the current strategy was working, as evidenced by recent client wins.

The news of the takeover comes just weeks after MVI, a £100m portfolio in the UK Smaller Companies sector, listed a new acquisition vehicle on the London market. Marwyn MAC Alpha is run by MVI managers James Corsellis and Mark Watts, who said the ‘current economic environment will present attractive opportunities to invest in, improve, and grow companies in partnership with an industry-leading executive or management team’.

MAC Alpha will look at a broad range of sectors for an acquisition target, with the managers looking at automotive and transport, business-to-business services, clean technology, consumer and luxury goods, financial services, banking and fintech, insurance, reinsurance and insuretech, as well as healthcare and diagnostics, and media and technology.

Marwyn Asset Management has invested an initial £630,000 into MAC Alpha, equal to 90% of equity, and has arranged to invest up to £20m more to fund due diligence or finance an acquisition.

MVI shares stand on a wide 35% discount below their net asset value giving the company a maket value of just £65m.

 

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