Agency Chairman Jerry Siano, 59, is relinquishing his ceo post. Ayer Vice Chairman-Chief Operating Officer Thomas Maxey, 56, is retiring, and his duties will be assumed by Chief Financial Officer Glenn Corlett. Patrick Cunningham, 50, agency vice chairman-creative director, becomes president-ceo of the New York office.
These moves, which the agencies said were to be announced once the merger was done, instead immediately followed Ayer's botched courtship of Riney, a union that Ayer had claimed until last week was all but a done deal.
Ayer insiders say Riney Chairman Hal Riney got cold feet; the Riney side says Ayer took too long to get to the altar.
What both camps agree on is that it was Mr. Riney, 61, who called off the $24 million wedding.
"Deadlines were not met; people were not responding," Mr. Riney said. "Jerry [Siano] was not in the discussions. That didn't make us feel any more comfortable."
Mr. Siano said he was "personally disappointed" about the breakdown.
"I think it would have been a great thing for both Riney and Ayer," he said. "It's like anything else, when you give birth to a baby you like to see it develop. I'm extremely disappointed because I like Hal. We both agreed we could do some great things together."
The Ayer camp argues the investor group providing funds for Ayer's acquisition of the San Francisco-based creative agency was simply being "thorough" in finalizing details. It was Mr. Riney, they contend, who-at the 11th hour-feared relinquishing command of his agency.
A deal, in the works since last September, was said to be down to the last stroke. Then, Ayer insiders claim, Mr. Riney abruptly called everything off last week, when he was to have inked his personal contract with the New York-based agency.
Mr. Riney contends, however, that he notified Ayer board member and investor Richard Humphreys in a letter Jan. 24 that he'd "had it," sensing that the deal was more of an acquisition by investors than a partnering with Ayer.
"I said it 10 times before I sent the letter," Mr. Riney said. "I hung in as long as possible, but things just didn't seem right."
Still, Mr. Riney, who maintains he only received preliminary papers on the deal after it was called off, acknowledged that "details could have been worked out."
Insiders said Mr. Riney's concern related in part to the stability of Ayer's roster. Riney claims $350 million in billings; Ayer claims U.S. billings of more than $800 million. Last December, AT&T reshuffled assignments, and in January, Ayer lost Sterling Winthrop's estimated $65 million Bayer aspirin account.
At the same time, Riney experienced a boom, snaring First Interstate Bank, estimated at $35 million to $40 million; Sun Maid Raisins, $5 million to $8 million; and creative on Bally's Health & Tennis Corp.'s $50 million account.
Secondly, Mr. Riney is said to have feared his agency's fortunes would be used to bolster Ayer's operations.
Mr. Humphreys vehemently denied Ayer is anything but healthy, noting it was profitable in 1993 and is expected to be again this year.
Indeed, last March Ayer received an all-cash infusion from Adcom, an investor group led by Mr. Humphreys and Choi Won-Young, president-owner of Seoul-based International Media Institution. The 60% majority position taken by the investor group, which includes Ayer senior management, is said to have left the agency debt-free and given it a $30 million acquisition fund.
As part of the Riney deal, agency insiders say Mr. Riney was slated to get a lump sum upfront and a multiyear $300,000 per annum consulting contract, which is said to have represented less than 10% of the total package he would have gotten.
But Mr. Riney isn't the only executive believed to have feared losing control. Although Mr. Siano is said to have rankled Mr. Riney by "merchandising" the almost-deal to Ayer clients, Riney insiders contend Mr. Siano sensed his waning authority at the agency and believed Mr. Riney's role in a merged shop would further undermine him.M
Also contributing to this story: Gary Levin, Laurel Wentz, Dagmar Mussey and Pat Sloan.