WPP to appeal on bid ruling

SIR Martin Sorrell was dealt a severe blow by the Takeover Panel on Thursday after it ruled that his WPP advertising group could not withdraw its £436m bid for media buyer Tempus.

WPP, whose 555p-a-share offer looks overpriced in the wake of the US terrorist attacks, is appealing against the ruling. Sorrell argues that there has been a 'material adverse change' in Tempus' prospects since 11 September and reckons it is unfair for the panel to force the bid to go ahead. The full panel will meet next week to hear the appeal, but analysts do not rate Sorrell's chances.

Tempus rose 20p to 530p, while WPP jumped 31 1/2p to 590 1/2p. Tempus founder Chris Ingram stands to make more than £60m if the deal goes ahead and said he 'welcomes' the ruling. Tempus is 'firmly of the view that there are no grounds for allowing the material adverse change condition to be invoked'.

WPP declined to comment. Analysts had always expected the panel to rule in favour of Tempus, but see Sorrell as a smart operator who might have pulled a rabbit out of the hat. He will be acutely embarrassed if the appeal fails. He might also face an exodus of Tempus staff when the takeover is completed.

In 1990, the Panel allowed Godfrey Davis to withdraw a hostile bid for Sketchley after the dry cleaner had warned profits had fallen by more than 60%.

Tempus' profits have been hurt by the slump in the advertising sector. But this impact has been felt across the entire industry.

Separately, WPP revealed a 6% fall in third- quarter like-for-like revenues, in line with forecasts. It has cut 3,146 jobs, about 6% of the workforce.