After a brief flirtation with French agency group Publicis, New York-based Young & Rubicam and the UK’s WPP Group look set to announce their nuptials after a weekend of tough negotiating. The sum now on the table is believed to be “slightly higher” than the $5.5 billion in WPP stock originally on offer.
The differences that sundered the two sides ten days ago, causing Y&R chief executive Tom Bell to ogle Publicis, appear to have been resolved. Insiders say Y&R is no longer insisting on full autonomy for the first year of the merger and has accepted certain restrictions that lock-in the shareholdings of its senior executives and prevent them from decamping with their clients.
Problems will be resolved by an integration committee comprising two executives from each side. WPP’s Sir Martin Sorrell and Paul Richardson, respectively its chief executive and finance director, will represent WPP; Bell and Y&R finance director Mike Dolan, who is expected to become the agency's chief executive, will safeguard Y&R.
The deal, which effectively is an agreed takeover by WPP, will create the world's biggest advertising group. It is thought that the pendulum swung back towards the WPP offer after the the Y&R board displayed a distinct lack of enthusiasm of for Mr Bell’s preferred option of a “merger of equals” with Publicis.
Y&R's annual meeting is due this Friday, setting a provisional deadline for a deal. That implies that an agreement will have to be reached by mid-week to give the two sides time to clear it with Ford Motor and their other big clients.
Sourced from: Financial Times