French-owned global network Publicis has offered £5 per share for Saatchi & Saatchi valuing the UK agency group at around £1.1 billion. Publicis clearly means business, its per-share offer representing a massive 51% premium on Saatchi’s opening share price yesterday of 331p.

Last month Publicis, which is some four times larger than Saatchi, lost out to Britain's WPP in the battle for American network Young & Rubicam. Many in the ad world believe that the deal foundered on the rocks of account conflict between Publicis’ client Renault and Y&R’s General Motors. Onlookers believe the savvy French shop will have already conducted discreet soundings to ensure that a similar problem does not arise with Saatchi’s Toyota business.

A successful bid is likely to trigger Saatchi's multimillion-pound share incentive schemes linked to the agency’s strong performance in the advertising industry. Last year the group posted pre-tax profits of £38.6m on revenues of £400.7m, increasing margins to 10%.

News source: Wall Street Journal