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No early end in sight for
WPP/Tempus takeover battle

LONDON - The WPP Group/Tempus saga looks set to drag on until at least the end of this week, as both companies argue their cases to the Takeover Panel.

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The Takeover Panel was tipped to make its ruling at the beginning of the week on whether or not Sir Martin Sorrell's WPP can invoke the adverse material change condition and let its £432m bid for Tempus slide.

On Monday, WPP extended its deadline for shareholder acceptance and revealed it has further information to present to the panel. That information has not been disclosed publicly, but is believed to hinge around whether or not media-buying firm Tempus is likely to issue a profit warning.

However, for WPP to be successful in using the adverse material change clause, Tempus's profits would have to fall by at least 20%. Analysts had been expecting it to say that profits are set to be down by around 10%.

Even if Tempus does issue a profit warning, the company can argue that it is an industry-wide issue, not company specific. There is also the fact that WPP bought 3% of shares in Tempus after the September 11 terrorist attacks, around which WPP's argument hinges.

WPP shares, which had been trading up over the past week, were falling when the markets opened this morning, down 1.7% to 563.5p.

If the Takeover Panel does rule this week, it is likely that the losing side will appeal the ruling.

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