Lowe management buyout mooted if Interpublic is broken up

NEW YORK - Interpublic Group-owned network Lowe Worldwide could be sold to its management if the company were to be broken up, according to a senior executive.

The question over Lowe's future and the wider issue of Interpublic was raised at a meeting with journalists as part of the AdForum International Summit.

In response to one question, Ed Powers, chief operating officer at Lowe Worldwide, said that the current strategy for Interpublic was to provide shareholder value by building strong brands, but added that management buyouts and sell-offs could be a possibility some time in the future.

However, Lowe boss Tony Wright was quick to deny that the management had discussed the matter.

Wright, who took over as chief executive officer of Lowe Worldwide in September 2004, said the management had not "spent a minute" discussing the possibility, after Powers' comment.

"I guess nothing is impossible in a holding company scenario, but that is not what we're spending time on," Wright said.

Speculation that the group could be broken up has arisen after a minority Interpublic shareholder, Charles Miller, called for a "prompt sale" of the company. Interpublic had tried to have his "Maximum Value Resolution", in which he called for the sale, excluded from the proxy at its annual general meeting, but last week failed.

Lowe's management denied that problems at Interpublic, stemming from an extensive accounting scandal that have prevented it from filing its 2004 results, had hampered restructuring within the network to what Wright has dubbed the "lighthouse" model.

He said that most people working in the Lowe network felt that lines of communication were far quicker now that layers of management had been removed.

Wright added that Interpublic had been completely supportive of the lighthouse restructuring plan, and that his time had been spent working for clients and not dealing with Interpublic issues.

Interpublic is due to file results from 2004 and the first half of 2005 on September 30. At the same time as dealing with these issues, rival ad network Grey Worldwide has said it will sue Interpublic because it had poached Steve Blamer to head the Foote Cone & Belding network.

The idea behind the lighthouse restructure is a series of hubs that offer fully integrated marketing services. The plan has seen Lowe make dozens of regional managers redundant in an attempt to shore up the struggling network without closing any of its 107 offices.

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