Advertising shares soar on BDM news

Shares in Saatchi & Saatchi and Cordiant leapt on Wednesday morning following news of the merger of Leo Burnett and MacManus, amid speculation that the pair will be the next takeover targets.

Shares in Saatchi & Saatchi and Cordiant leapt on Wednesday morning

following news of the merger of Leo Burnett and MacManus, amid

speculation that the pair will be the next takeover targets.



Analysts also mooted the possibility of Grey merging with Saatchis,

bringing Procter & Gamble’s two smaller agency networks together.



Saatchis’ stock had gone up by nearly 8 per cent to 265p from a base of

244.50p as Campaign went to press, while Cordiant’s share price also

rose by around 8 per cent, with the day’s highest rate at 194p.



The trading activity and interest surrounding the two companies has been

fuelled by the fact that the Interpublic Group was jilted at the last

minute by MacManus, leaving it hungry for a fast acquisition. Extensive

preparation had been made within the group for a relatively effortless

merger with MacManus but the merger of Ammirati Puris Lintas with Lowe &

Partners Worldwide means that there is now a gap for a third network in

the group.



Lorna Tilbian, an analyst for West LB Panmure, said: ’IPG has to fill

its gap with a third network having made way for it, and Saatchis must

look like an attractive option. The preparation has already been made

for the possibility of a Unilever network sitting happily with a Procter

& Gamble one.’



Independent media buying networks have also been put under scrutiny by

the formation of BDM.



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