WPP owns 22 per cent of Chris Ingram's Tempus, so the reaction of
Sir Martin Sorrell was always going to be important to the final outcome
of Havas' bid for the media buying company. Would Sorrell counter-bid or
accept the Havas offer of 541p per share and pocket the cash?
At first, the advertising grapevine had it that the second option was
most likely, the theory being that Sorrell's hands are full with a
recession to fight his way through and management issues at Young &
Rubicam in New York to resolve.
But what do grapevines know? WPP entered the fray on Monday with a bid
14p per share higher than Havas. So even if Sorrell's plan is to squeeze
more money out of Havas before retreating (the ultimate win:win tactic),
the story is far from over.
He could after all be upping the bid price to force Havas to help him
pay for another, bigger prize -Aegis. While the Tempus deal has no
direct implications for Aegis, it clearly highlights the value of
independent media companies. It puts Aegis - which owns Carat, the
European market leader in media buying - under the microscope.
The interesting thing in the case of Tempus is that Sorrell faces such
hostility. Though bound by fiduciary duty to recommend a higher offer to
his shareholders, Ingram has made little secret of his animosity for
WPP's founder. A serious, genuine man whose idea of extravagance is
buying a flat in Bournemouth (that was his splurge following the
flotation of CIA in 1989), Ingram, at 58, will surely not be persuaded
to stay if WPP wins out.
But history suggests that Sorrell will forge ahead despite management
hostility. Opposition from managers did not stop him mounting
advertising's two biggest hostile takeovers - first for J. Walter
Thompson in 1987, and then for Ogilvy & Mather in 1989. And yet there
are some fundamental differences between Tempus and, say, JWT that may
govern the success of the deal for WPP.
Creative agencies' relationships with clients can transcend changes in
ownership. Contrary to statements before the WPP bid for JWT went
through, most key managers and clients did stick with the company. Its
relationships with clients were based on a heritage that transcends
people combined with decades worth of intellectual input to clients'
But first-generation media agencies still run by the founder, like
Tempus, may prove more fickle. Especially if the founder is made richer
by the takeover to the tune of £70 million or so and chooses to
walk away. With media buying decisions rarely made at the top table,
usually taken by procurement people and still largely based on cost, it
would be easy to switch a media account if a change of owner rocks the
So perhaps the issue for WPP is not what it would do with Tempus. Rather
it is: will the agency be worth having if key staff and clients leave?