AEGIS REPORTS STRONG 2005 PERFORMANCE

With Revenue Growth of 16.5%, Takeover Talks Likely to Resume

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LONDON (AdAge.com) -- Aegis Group turned in a strong 2005 performance, particularly in its fast-growing digital media and research divisions, that’s likely to further boost the independent London-based global media player’s takeover appeal.
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Aegis is building a formidable capability with its digital network Isobar, which acquired 10 businesses around the world in 2005 and grew by 110%. It now accounts for 15% of overall media revenue at Aegis.

Synovate, Aegis Group’s market research arm, remains a particularly attractive proposition for WPP Group, which wants to strengthen its offering in this sector. Synovate delivered organic revenue growth of 10.8% and made nine acquisitions last year.

$2.8 billion in new business
Robert Lerwill, CEO of Aegis, parent company to media specialist networks Carat and Vizeum, said the company's $2.8 billion in new-business wins was “very gratifying given the distractions during the year.” Revenue grew by 16.5% to $1.52 billion, and organic growth was 7.2%.

The “distractions” Mr. Lerwill referred to were overtures from possible buyers, starting with the joint approach made to Aegis last year by WPP and private equity company Hellman & Friedman. The two companies can make another approach in May 2006 under U.K. Takeover Panel rules, but Mr. Lerwill said he does not expect that to happen.

Neither do executives close to Aegis. One said: “They didn’t have anything much last time around. Hellman & Friedman’s heart wasn’t in it and the WPP board isn’t in the mood to make a big acquisition of this kind.”

Ever-present Bollore
Looming larger in the takeover scenario is Vincent Bollore, chairman of Paris-based Havas, who bought up 25% of Aegis Group to become its largest shareholder last year. There has been intense speculation that Mr. Bollore wants to create some sort of venture between Aegis, particularly Carat’s strong French operation, and the weaker Havas media arm MPG.

Jeremy Hicks, the chief financial officer of Aegis Group, said, “If something of absolute benefit to all shareholders comes up then we’ll do it. That’s what we’re here for.” Added Mr. Lerwill: “We are not closed-minded or confrontational on this.”

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