Marwyn vehicle circles M&C Saatchi – AdvancedAdvT Limited announced on Friday that, following its acquisition of 12,000,000 ordinary shares in M&C Saatchi (about 9.82% of that company), it has confirmed that it is interested in exploring a share exchange merger between AdvT and M&C. There is no certainty that any formal offer for M&C will be forthcoming, nor as to the terms of any such formal offer.
The Marwyn Funds collectively own 20,525,000 ordinary shares and 525,000 ordinary warrants in AdvT. As at 17 December 2021, AdvT accounted for 16.8% of the NAV of Marwyn Investments and 16.8% of the NAV of the 2021 realisation shares. The 2016 realisation shares have no exposure to this potential deal.
Vin Murria OBE, chairman of AdvT (pictured) is a non-executive director of M&C and owns 15,237,985 ordinary shares in M&C (12.46%) and 17,500,000 ordinary shares in AdvT (13.26%).
AdvT’s arguments in favour of the deal are reproduced below:
“The Board believes the enlarged group would have the opportunity to create significant value for its then shareholders. A merger would create an opportunity to build a data, analytics and digitally focussed creative marketing business with a strong balance sheet and additional management expertise in transforming businesses at pace and execute on complementary M&A. This would allow the enlarged group to continue its evolution and, crucially, accelerate the implementation of its growth strategy and therefore be increasingly relevant to its customers.
The Board believes the enlarged group would be well-positioned to take advantage of the structural changes arising from an acceleration of digitalisation, affecting the way businesses operate, engage and sell to customers, and would offer benefits to employees, customers and shareholders.
The merger, combined with a focus on a data, analytics and digital creative marketing strategy plus M&A, would enable the enlarged group to capitalise on the heightened opportunity to ‘navigate, create and lead meaningful change’ whilst guiding companies on their new digital journey. It would defend M&C’s traditional creative base against disruptive competitors and enable the enlarged group to grow market share against its peers.
The merger would also enable M&C to resolve the legacy put option issue as well as providing the cash to accelerate investment in the business and transformational digital led M&A.
The Company brings additional management skills with considerable expertise and experience to complement, accelerate and grow the enlarged group through strategic and bolt-on acquisitions in fragmented international markets. The Company’s management has proven previous success in identifying, realising and harnessing latent value within businesses.
The combination of the M&C brand and platform with the Company’s funding and experience is expected to increase the M&A opportunity pipeline. The combined reach and renewed appeal of the platform could attract many more quality assets.
The outperformance and valuation of data-led digital marketing agencies and consultancy peers demonstrates investor support for companies who successfully capitalise on the perceived market opportunity. Other digital marketing groups have been successful in using M&A to acquire digital capability. We see a significant opportunity for the enlarged group, with an accelerated data, analytics and digital strategy and combined stewardship, to achieve similar valuation multiples, improve the liquidity of the shares, implement a progressive re-instatement of the dividend policy which we believe will enhance the business’ attractiveness to investors.”
MVI : Marwyn vehicle circles M&C Saatchi