The UK-based advertising giant WPP Group PLC is seriously considering bidding for buying media buying agency, Aegis Group PLC. It was confirmed by chief executive Martin Sorrell, according to the Telegraph. US private equity firm Hellmann & Friedman would assist WPP in this pitch.
Sorrell stated that his main intention in buying Aegis was his company’s interest in Synovate which is Aegis's market research operation. Analysts, however, felt that if things went as planned by WPP, Hellman & Friedman might just keep Aegis’ media buying unit. Martin Sorell justifying his interest in Aegis said: "Scale is important in this business. Aegis has an interesting research business and it has always sat rather uncomfortably with the media buying business. There does not seem to be that much connection between the two.”
According to Financial Times report, Aegis is not keen on having an alliance with its French rival Havas SA. Vincent Bollore, chairman of Havas SA has reportedly hiked his stake in the UK group by 15 per cent.
Aegis offered to be up for sale when it received indications from French advertiser Publicis, which had evinced interest in the former by offering 1.6 million pounds.
Sorell’s interest has also been egged by the statement of Robert Lewill, Chief Executive of Aegis, who had reportedly said that there was no logic in having a link with Havas.
Meanwhile, La Tribune has reported that Publicis might retract its move to buy Aegis when fears rose within the company that the acquisition would increase its debt and reduce its chances to get an investment grade debt rating from credit agencies. As of now, Publicis is neither rated by Standard & Poor's nor Moody's.
Posted
on : Fri, 14 Oct 2005 19:20 GMT | Business News
By : Mark Richardson
|
