|Springer’s revenue and profit have plunged in the past two years. The agency fired about 50 people last summer and this fall started offering reduced charges, referred to as an “efficiency tariff,” for clients.
“There is no deadline,” said Oliver Schwall, Springer & Jacoby’s chairman. Interpublic did not immediately return calls.
The period for seeking bids was extended in order to inform the agency’s clients and bankers and get their agreement to a sale.
A key question for any buyer is whether Springer will be able to keep its biggest client, DaimlerChrysler. The agency has handled the Mercedes-Benz account in Germany for the past 15 years, but lost another DaimlerChrysler account, that for the tiny Smart car. The main Mercedes-Benz account represents about 30% of Springer & Jacoby's total gross income.
"Without the Mercedes-Benz budget, Springer's value is very slim," a German agency executive said.
Springer’s revenue and profit have plunged in the past two years. The agency fired about 50 people last summer and this fall started offering reduced charges, referred to as an “efficiency tariff,” for clients. Most seriously, there is persistent speculation about a Mercedes-Benz review. Omnicom Group, for whom DaimlerChrysler is a major client, has been mentioned as one of the possible bidders for Springer, but that appears less likely as Springer’s hold on its biggest client loosens.
Interpublic inherited Springer & Jacoby with its acquisition of True North Communications, owner of a minority stake in Springer. Interpublic increased its stake to 51% last year, but wants to get rid of the agency because the German shop isn’t a strategic fit for Interpublic. Founders Reinhard Springer and Konstantin Jacoby own 25% of the agency's shares and a majority of the voting rights, but that is likely to change in a sale.