SPOTLIGHT ON: WPP/CIA: Adland’s empire builder picks CIA for his latest manoeuvres - What strategy lies behind Martin sorrell’s moves on CIA? Alasdair Reid reports

By ALASDAIR REID, campaignlive.co.uk, Friday, 13 June 1997 12:00AM

Don’t ever play poker with Martin Sorrell. He might move in mysterious, inscrutable ways but he usually ends up holding all the cards. Just what is he up to this time? Last week, he emerged rather rapidly out of left field to pick up a 14.4 per cent stake in CIA Group. Is this the prelude to a ’Victor Kiam’ takeover - he likes the product so much he has to buy the company?

Don’t ever play poker with Martin Sorrell. He might move in

mysterious, inscrutable ways but he usually ends up holding all the

cards. Just what is he up to this time? Last week, he emerged rather

rapidly out of left field to pick up a 14.4 per cent stake in CIA Group.

Is this the prelude to a ’Victor Kiam’ takeover - he likes the product

so much he has to buy the company?



Or is there something more complex at work? Theories are cheap.

Surprisingly, though, the most obvious analysis - that WPP intends to

buy CIA as an off-the-shelf group media buying vehicle - is the least

popular.



For the past couple of years, Sorrell hasn’t hidden his desire to merge

the media operations of the two main WPP agencies, J. Walter Thompson

and Ogilvy and Mather. But little has happened on the ground, save for

some ’over my dead body’ posturing from senior media managers at both

agencies. What better way to move things forward than to borrow a

Saatchi and Saatchi blueprint? Saatchis created Zenith by buying the Ray

Morgan and Partners media independent, pouring group billings in to it

and changing the nameplate.



Sorrell knows Saatchis’ history and is the most accomplished dealmaker

in ad history, having built the industry’s two biggest empires. As

Saatchis’ finance director he engineered acquisitions - from Compton

through to Bates - that Maurice and Charles had only dreamed of. And

when he parted company with the brothers, he started again on his own

account.



Is he doing a Zenith? Well, perhaps not. CIA is bigger and more complex

than RMP. Although CIA has been successful in developing joint ventures

and juggling several media brands, these have tended to be in

partnership with small agencies. Absorbing WPP billings would be far

more painful, leading to an inevitable loss of existing CIA clients. Nor

is CIA like O&M - a hostile takeover would be far harder because the

board directors, including Chris Ingram, own almost 40 per cent of the

company.



Ingram, according to several sources, doesn’t much care for Sorrell, nor

is he driven by a desire to sell up and get rich quick.



WPP talks of forging a working alliance. It’s hard to see how that might

work. It would only make sense for CIA if it could use WPP to gain a

foothold in the US market. But WPP doesn’t need CIA there - in the US

and Asia Pacific the WPP agencies’ media product is as good as any on

the market.



Two other theories are more credible: first, the Machiavellian

assumption that the move is designed to focus the minds of senior

managers at O&M and JWT and, second, that Sorrell isn’t doing a Zenith

at all, he’s doing a ’Bruce Crawford’. Crawford, the chairman of

Omnicom, is the one man in advertising that Sorrell really rates. It was

Crawford who decided, many years ago, to take a significant minority

stake in the Carat holding company, Aegis.



Did Crawford see Carat as Omnicom’s Zenith? Not a bit of it. He wanted

to understand the media buying business and the quickest way was to buy

a seat on the board, gain access to the books, listen and learn. Then,

as Omnicom has done, you can feel confident about setting up your own

operation from scratch.



It was no surprise to hear Ingram saying last week that he had no

intention of inviting Sorrell to join the board. Whatever Ingram has to

sell, he doesn’t want to let it go cheaply. But, compared with Sorrell,

the capable and wily Ingram is still a relative novice at this sort of

thing. Sorrell’s next move - his response to that rejection - will go a

long way to signalling his long-term intentions.



Sorrell might see CIA as a damned good investment, something to set

against a rainy day. He may sit tight and let the dividends roll in. But

don’t bet on it.



This article was first published on campaignlive.co.uk

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