A buying flurry triggered a sharp rise in the share price of WPP Group following its withdrawal from takeover talks with Young & Rubicam [WAMN, 2-May-00]. Shares soared by 64p to £11.98, illustrating the twitchiness induced in UK institutional investors at mergers involving global ad agencies – resulting more often than not in substantial loss of revenues due to client conflicts.

Meantime, WPP chief executive, the canny Sir Martin Sorrell, is said to be keeping an eagle eye on the negotiations now in train between Y&R and Publicis. Should the latter make a formal offer for Y&R, ad industry observers believe Sir Martin could pounce with a hostile counter-bid. Until now, he has voiced doubts about the practicality of hostile bids for people-based businesses such as ad shops; insiders believe he could be about to change his tune!

The Times