Shares in Tempus have dropped 12% after the media buying group gave its backing to advertising giant WPP's 555p takeover offer.

Tempus's board announced this morning it would recommend the offer after rival bidder Havas pulled out of the running, citing as reasons deteriorating market conditions and last week's terrorist attacks in the US, which have accelerated the advertising slowdown.

The decision means WPP will have to go ahead with an acquisition of Tempus if, as now seems likely, at least 90% of the company's shareholders accept its offer by the deadline of October 1.

But analysts have suggested WPP may try to pull out of the deal because the collapse in share prices means it faces paying way over the odds for Tempus.

"We don't know what will happen to the advertising market next year but it is not looking good at all," said Nicola Stewart, media analyst at Commerzbank.

"WPP may have grounds to back out. Under exceptional economic circumstances companies can invoke a clause in the takeover code that allows them to pull out."

To do this, WPP would have to convince the takeover panel that last week's events in the US were of "material significance" to the deal.

But recent events suggest that WPP's chief executive, Sir Martin Sorrell, will want to press ahead with the acquisition despite the collapse in global share prices.

Earlier this week he bought another 3% stake in the advertising agency.

A spokesman for WPP declined to comment on the company's plans.