Interpublic Group of Cos., meanwhile, is said to be closing in on a purchase of Ayer's Chicago office, with clients including candy marketer Leaf and footwear marketer Wolverine World Wide.
The remainder of Ayer's $20 million in AT&T billings will be assigned to other AT&T shops due to conflicts with DMB&B's SBC Communications account.
BBDO COULD WIN MORE
AT&T executives said it was too early to comment on where the ad business is going but confirmed the BBDO shift is likely. Insiders believe BBDO will also emerge as the winner against Young & Rubicam, FCB/Leber Katz Partners and McCann-Erickson Worldwide in pitches early next month for a corporate branding campaign.
The fate of Ayer's media buying arm, Media Edge-which handles close to half of AT&T's $660 million in media buying-is still up in the air. At least two Interpublic insiders said that holding company wants Media Edge and would fold it into McCann or Western International Media.
NO AYER ROLE FOR CHOI
Final terms of DMB&B's deal for Ayer's holding company, Adcom, won't be resolved until DMB&B does due diligence and the fate of Ayer's various units is determined. Current owner W.Y. Choi is expected to walk away without an ownership position.
DMB&B is expected to sell off other Adcom parts, including Ayer Public Relations, direct marketing unit Worldwide 1 on 1 and Blue Marble Interactive.
Another key aspect of the deal is the renegotiation of Ayer's high-rent lease at Manhattan office tower Worldwide Plaza. Re/Locate, a real estate information service, said Ayer's lease runs until in 2009, but Ayer is expected to begin renegotiations soon.
DMB&B Chairman-CEO Roy Bostock called the Ayer deal "a key strategic move to establish a second network."
Ayer CEO Mary Lou Quinlan also stressed Ayer's autonomy: "We will be separate and different."
Shortly before the sale was announced, Mr. Choi hired AdMedia Corporate Advisors, a New York investment banking company specializing in agency deals, to sort through a group of prospective buyers to find the best deal for the nation's oldest ad agency.
"In the end, both sides are coming away quite happy," said Abe Jones, AdMedia managing director. "Both are getting something valuable."
Ayer gets international resources that it has desperately wanted, while DMB&B gets more business from two of its best clients-Procter & Gamble Co. and General Motors Corp.-plus new blue-chip clients like Gillette Co. and Avon Products.
WANTED: CREATIVE CHIEFS
The deal also leaves DMB&B with two empty creative directors' offices. Both DMB&B's New York office and Ayer have been looking for new creative directors since earlier this spring, when Mark Fenske left Ayer and DMB&B moved Ross Sutherland into a new worldwide role. Dawn Hudson, managing director of DMB&B, New York, said she is conducting an active search for a DMB&B creative director.M
Contributing: Pat Sloan, Chuck Ross and Kim Cleland.