Brazilian supermarket chain Grupo Pão de Açúcar is putting a novel twist on its mega-agency review: Rather than invite shops to pitch, it's asking them to bid on the in-house agency that handles the $125 million account.
Given the financial nature of the review -- it's as much an acquisition as a new-business pitch -- holding companies will be deeply involved in assessing the deal.
According to marketing publication Meio & Mensagem, Ad Age's editorial partner in Brazil, Pão de Açúcar met with eight Sao Paulo agencies, and five are moving to the next stage: WPP's Young & Rubicam; Omnicom Group's Lew Lara/TBWA; Publicis; Havas; and Grupo ABC's Africa. These shops will receive confidential information and formulate a "business proposal" for in-house agency PA Publicidade.
"We are working on the possibilities and will be deciding how we will pitch," said Maurice Levy, Publicis Groupe's chairman-CEO, in an email.
Martin Sorrell, WPP's chief executive, declined to comment. All shops signed nondisclosure agreements.
The stakes may be highest for Mr. Sorrell and WPP. In Brazil, French supermarket Casino now controls Pão de Açúcar and local retailer Casas Bahia, Brazil's biggest media spender at $730 million a year, according to Ad Age's DataCenter. The Casas Bahia account, at Y&R, is also under review.
Agency execs say Casino wants to establish its own agency relationships by selling Pão de Açúcar's in-house agency and reviewing the Casas Bahia business. WPP's Y&R could walk away with the Pão de Açúcar in-house agency and retain Casas Bahia, or Pão de Açúcar could close a deal with another agency, and Y&R could lose its biggest account if Casas Bahia leaves. In another scenario, Y&R might keep Casas Bahia, but on less-favorable terms.
Grupo Pão de Açúcar in a statement described the deal as "a process of consultation with ad agencies to sign a strategic partnership with PA Publicidade" rather than a sale. The company didn't respond to questions from Ad Age. With some 250 staffers, the PA Publicidade in-house agency is as big or bigger than some of the agencies that might take it over.