IPG Sale Whispers Refuse to Go Away

21 September 2005

The possible break-up of troubled Interpublic Group has reared its ugly head again, despite fighting talk from ceo Michael Roth.

The world's third largest advertising conglomerate, headquartered in the US, has been told by financial watchdog, the Securities and Exchange Commission, that interventionist shareholder Dr Charles Miller, a psychologist from New York state, can put forward a "Maximum Value Resolution" at the upcoming annual meeting.

This is a non-binding proposal that shareholders could vote on, urging IPG's board "to arrange for the prompt sale" of the company "to the highest bidder".

IPG had asked the SEC to throw out the proposal but has so far refused to comment on the watchdog's refusal of its request.

Roth has dismissed a break-up scenario, insisting he is committed to enhancing shareholder value by improving operating performance.

However, to pile on the misery, the company revealed last week "possible employee misconduct" during ongoing investigations into longstanding accounting difficulties [WAMN: 16-Sept-05].

One unnamed senior exec says: "We keep thinking this can't get any worse, but screwing up the accounting is one thing, engaging in criminal activity is a whole other thing. Clients have to be wondering if they should work with this company. We have got to be getting closer to that [break-up] scenario."

IPG agencies have also been rocked by a number of major account losses since the beginning of the year, estimated to be worth around $4.7 billion (€3.86bn; £2.6bn).

Data sourced from AdAge.com; additional content by WARC staff