PERSPECTIVE: WPP circles Tempus but is Sorrell serious or playing for cash?

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'

corporate strategy.



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

boat.



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?



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