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(June 15, 2001) -- Agency shares dove today after several U.S. and European holding companies cut back their earnings forecasts on fears of a continued slowdown. The statements followed a dim forecast Thursday from Interpublic Group of Cos. forecaster Robert Coen, who cut his estimate for ad spending growth at his annual mid-year briefing.

Shares of Interpublic and True North Communications dropped 14.61% and 14.89%, respectively, after Interpublic announced it will take charges of more than $300 million to restructure the company and integrate True North. True North shareholders are set to vote June 19 on the deal.

Wall Street was not amused. Merrill Lynch advertising analyst Lauren Rich Fine called the charge "disconcerting" and dowgraded Interpublic stock to neutral, while Credit Suisse First Boston's David McMurry warned "IPG has run its rainy-day fund dry."

Interpublic stock closed at $30.74, down $5.26, and True North fell $6.08 to close at $34.76. The drops reduced True North's price tag to $1.78 billion, down from a high of $2.34 billion in April. -- Mercedes Cardona

Copyright June 2001, Crain Communications Inc.

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