Bid Speculation Mounts as Interpublic Stock Plunges

17 July 2006

Since Michael J Roth assumed the dual role of chairman/ceo at Interpublic Group in January 2005 its share value has slumped 41% from $5.6 billion. In the agency holding company's 1999 halcyon days, its stock orbited at $16.8bn.

Last Friday IPG shares sank to their lowest level in fifteen years - about $3.4bn - resurrecting speculation that the world's third largest marketing services company is wide open both to friendly or hostile bids. Private equity groups, with money burning holes in their pockets, are reportedly circling.

Asked about the likelihood of a bid, an unidentified analyst told Advertising Age: "That's something that's on the table. It's a function of where the stock has gone."

Interpublic itself was leery, telling the adland bible: "We are in the early stages of our turnaround, and the best way for us to maximize shareholder value continues to be by improving operating performance, not by considering a sale."

However, AdAge quotes one senior executive at the holding company: "Every single manager at IPG is talking about what is the best exit strategy . . . both for them as individuals and for their [constituent] companies."

Data sourced from AdAge (USA); additional content by WARC staff