Omnicom defeats WPP to snare GGT

By KAREN YATES, campaignlive.co.uk, Friday, 30 January 1998 12:00AM

Omnicom has made a pounds 143 million offer for the GGT Group in a deal that would make the US-based advertising conglomerate the largest in the world in revenue terms.

Omnicom has made a pounds 143 million offer for the GGT Group in a

deal that would make the US-based advertising conglomerate the largest

in the world in revenue terms.



Omnicom’s 200p a share offer has already had the seal of approval from

GGT’s board including its chairman, Michael Greenlees, and BDDP’s

chairman, Jean Marie Dru, both of whom will take up senior management

positions within Omnicom.



Greenlees, who also held discussions with WPP, said the sale of GGT to

Omnicom would benefit clients and staff. ’At this stage in our company’s

development, it represents value for our shareholders.’



John Wren, chief executive of Omnicom, denied that the deal would result

in the merger of Omnicom’s TBWA Simons Palmer in London with BDDP

GGT.



But privately, insiders acknowledge that a merger would make sense.



Wren said: ’I can tell you with some certainty that we have no plans to

merge in London. With respect to the rest of the group, we will consult

with management and clients before making any final decisions.’



TBWA has 87 agencies worldwide while the GGT-owned BDDP network is

concentrated in France - where TBWA is weaker - in the US and the UK.

The two networks have few global conflicts. TBWA’s flagship client is

Nissan while BDDP, despite handling BMW in France, does not have a

network-wide car client.



Sources close to the deal said BDDP’s co-founder, Jean Claude Boulet,

would be leaving the group. He is reported to be rejoining his old

network, Young & Rubicam. They added that Greenlees was tipped to head

the global management of any expanded TBWA network.



The offer, which followed BDDP’s loss of the Procter & Gamble business

from its New York agency last week, received a mixed response from

analysts.



Some regarded it as ’at market level’ while others, notably Lorna

Tilbian of Panmure Gordon, said the deal was ’no knockout’.



It means that shareholders are faced with receiving 20p less a share

than when GGT first bought the ailing French BDDP network in April. In

London, the share price rose more than 15 per cent on Wednesday to close

at 202.5p.



The deal would add about dollars 300 million in revenue to Omnicom,

which reported dollars 2.6 billion in revenue in 1996. WPP also reported

revenue of dollars 2.6 billion in 1996.



Analysis, p2.



This article was first published on campaignlive.co.uk

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