The dust has now settled on the material adverse change saga that surrounded WPP’s offer for Tempus. Practitioners are turning their attention to how they could more adequately protect an offeror which wants to retain the flexibility to withdraw from an announced offer should it wish to.
On the face of it, the Takeover Panel’s decision on the Tempus bid prevents an offeror walking away except in the most extreme circumstances. The panel adopted the position that, to be successful in lapsing an offer in the event of a material adverse change (MAC), an offeror needs to demonstrate “an adverse change of very considerable significance striking at the heart of the purpose of the transaction [analogous to] something that would justify frustration of a legal contract”.
