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Episode Seven: Man And Machine
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Activist investor Elliott Management has reduced its stake in Interpublic Group of Cos. to the equivalent of 4.8% from the 6.7% it disclosed in mid-2014, according to a public filing.
When Elliott took its initial stake almost two years ago, the industry was led to believe the company would push for the agency services holding company to sell. But the activist group struck a deal with the holding company that included a board shakeup – three new members replacing two existing members -- and the formation of a finance committee focused on improving IPG's margins and advising on global financial strategies and transactions.
The move to reduce its stake comes on the heels of the end of a year-long standstill agreement between IPG and Elliott. That leaves Elliott free to take no action; to extend its agreement by negotiating new terms with the holding company; or to try to wrest majority control of the board. The deadline for IPG shareholders to nominate directors for consideration by shareholders at the spring annual meeting was Feb. 21.
Elliott now owns 3.8% of IPG's stock, plus an additional economic interest of 1.0% related to derivative agreements. That means Elliott has voting control for 3.8% of IPG stock and "economic exposure" for 4.8% of IPG stock.
Elliott and IPG declined to comment.
IPG's stock this afternoon was trading at $21.21 a share, up 7 cents. The stock traded below $18 in May 2014, when rumors of Elliott's interest surfaced, and closed at $19.85 on July 23, 2014, the day before Elliott disclosed its stake.
IPG recently closed a successful year. The holding company, which has a portfolio including McCann Worldgroup, FCB, IPG Mediabrands and Weber Shandwick, among others, in April reported a first-quarter operating profit for the first time in over a decade and beat analyst expectations in subsequent quarters.
Contributing: Bradley Johnson