CLOSE-UP: THE CAMPAIGN INTERVIEW/MIKE GREENLEES; Adman turned City slicker scoops the BDDP prize

Karen Yates discovers the careful manoeuvring that helped GGT capture BDDP

Karen Yates discovers the careful manoeuvring that helped GGT capture


In London you can almost hear the sound of cheque books flapping as the

world’s few big agency networks jostle for the holy grail of advertising

- critical mass.

But last week, while the sharks were still totting up their price/

earnings ratios, a relative minnow - GGT - nipped in and bought one of

the world’s top 15 networks. It’s a move that will triple GGT’s size and

give it a coveted place on the Procter and Gamble roster, and it was all

achieved for pounds 20 million below the asking price (Campaign, last


How did the GGT chairman, Michael Greenlees, do it? How, when the likes

of Grey, Cordiant and the mighty WPP had tried and failed, did GGT

manage to pull off the David-eats-Goliath deal for BDDP? Campaign caught

up with Greenlees two days after it broke the news of the coup. It was

the culmination of five months of hard work, and Greenlees and his

financial director, Mark Bayliss, were exhausted but jubilant.

It began, Greenlees says, in an appropriate venue for the British

takeover of a French group - the Waterloo room at the Grosvenor House

hotel in London.

It was here that BDDP’s chief executive, Jean-Claude Boulet, confided to

Greenlees his fears for the way the sale of his network was going. BDDP

had been put on the block by a group of its principal shareholders. But

it had not brought the kind of bids Boulet desired. Either they involved

breaking up the group or the merger of BDDP into a faceless US network.

The conversation set light to that part of Greenlees marked ‘global

expansion’. Greenlees had long harboured the desire to deliver what he

calls ‘global reach’ to GGT’s relatively modest clutch of agencies,

which are profitable but firmly stuck in the middle ground in terms of

size. (In 1994, for example, GGT was in negotiations with Young and

Rubicam - a deal that would have given Greenlees access to an

international network. The talks eventually foundered.)

His chat with Boulet put Greenlees in mind of an earlier conversation

he’d had with Frank Assuma, chief executive of BDDP’s flagship US

agency, Wells Rich Greene BDDP. Assuma and Greenlees knew each another

well enough and had chewed the fat about the problems ahead for the

group. Perhaps, Greenlees thought, if he could get BDDP management and

clients on his side, then an affordable deal might be in his grasp.

Over the years - and he’s been in advertising for 30 of them - Greenlees

has made the transformation from adman to international company boss,

and this stood him in good stead for the solid round of financial

schmoozing and closed-door conversations. His prudent purchase of three

regional US agencies seven years ago had already won him brownie points

in the City, which is intolerant of expansion freaks who are sucked into

the expensive razzamatazz of New York. Just as important, he has also

earned the reputation in the US for being an interested but not

interfering agency owner.

So when Greenlees and Bayliss began their pursuit of BDDP they had

plenty of the feelgood factor behind them. Which is just as well,

because the deal they devised delivers equity rather than cash to a

sizeable portion of its shareholders. In essence, the arrangement puts

BDDP’s value at about pounds 105 million. Around pounds 55 million will

come from a one-for-one rights issue by GGT, pounds 20 million will be

raised in debt, and pounds 35 million in shares in the new GGT will be

distributed to shareholders.

So what will the deal deliver if it is approved by shareholders next

year? Well, GGT plc will triple in size, and overnight it will move from

earning two-thirds of its revenue in the US and only one-third in

Europe, to a situation where 40 per cent comes from the US, 30 per cent

from France and only 8 per cent in its home base of the UK.

BDDP will be run as a separate network reporting to the GGT holding

company with the existing chief executive, Boulet, and his chairman,

Jean-Marie Dru, still in place. Boulet, Dru and two other senior

managers will acquire about 2.5 per cent of stock in the new GGT as part

of the deal, and Dru and Boulet will sit as part of its expanded board.

If you ask Greenlees whether this means there will be any consolidation

between the GGT and BDDP groups, the answer comes back as: broadly

speaking, no, but that doesn’t mean never.

‘It’s early days to talk about that,’ he says carefully. ‘There are

areas of opportunity for cost savings. For example, in real estate. We

will be looking at how we can streamline some functions, such as

financial reporting, but where we have strong brands operating in the

marketplace there will be no need to change them.’

So what will be the immediate effect in London? The deal will, he says,

deliver serious international network credentials to all his agencies,

including London’s GGT Advertising. This is fortuitous timing, since GGT

is pitching for Wrangler’s pan-Europe business. The new arrangement will

not, however, ‘in the short or medium term’ affect the independence of

the UK agency, BST-BDDP, which is 51 per cent owned by the French


‘Suffice it to say that I’m comfortable with the way things are at the

moment in London,’ he says.

And that’s pretty much how the financial world was feeling by the time

Campaign went to press. It’s good, seems to be the message, to find an

adman who’s careful with our dough. Let’s give him more, and hopefully

we’ll watch it rise.

Perspective, page 16

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