Brave Bison’s M+C Saatchi Performance Acquisition Proposal ‘Fundamentally Undervalues the Division’

Brave Bison Group plc (LON: BBSN) confirmed its non-binding proposal to acquire M+C Saatchi Performance (MCSP) from M&C Saatchi plc (LON: SAA) for an enterprise value of £50 million, responding to recent press speculation.

The proposed acquisition aims to create a scaled digital media challenger to the global marketing networks by combining MCSP with Brave Bison's existing performance marketing operations.

The combined entity would become one of the largest independent performance marketing companies outside the US, boasting a significant presence in the UK and APAC regions, with minimal overlapping operations.

This strategic move signals Brave Bison's ambition to significantly expand its market reach and capabilities in the competitive digital marketing landscape.

In the year ending December 31, 2024, M&C Saatchi plc's Media Division, predominantly driven by MCSP, reported net revenue of £26.8 million, marking an 8% year-on-year growth. Brave Bison anticipates that MCSP would contribute a minimum of £8 million in Adjusted EBITDA post-acquisition.

The acquisition is projected to boost Brave Bison's pro-forma Adjusted EBITDA by over 80%, reaching £17 million. This substantial increase underscores the potential for significant financial gains for Brave Bison, contingent upon the successful completion of the deal, further solidifying the company's financial outlook.

Brave Bison expects the completion of the potential acquisition to be materially accretive to underlying Group earnings per share on a pro-forma basis. This projection highlights the expected financial benefits of the acquisition for Brave Bison's shareholders, suggesting a potential increase in shareholder value.

However, while M&C Saatchi's board acknowledged the unsolicited approach from Brave Bison, it firmly rejected the offer.

The Board believes that the offer fundamentally undervalues MCSP and fails to recognize the division's future growth prospects, which are integral to the company's overall growth strategy.

M&C Saatchi's firm stance indicates a strong belief in the intrinsic value and future potential of MCSP within its existing structure. The rejection suggests that M&C Saatchi is confident in its ability to independently drive growth and shareholder value through its current strategic plan, without divesting its performance marketing division.