Chicago-based Frankel is the country's No. 36 agency brand. Based on the industry standard, Frankel could fetch more than $130 million, or 11/2 times revenues. A deal could be struck by the end of the year.
It's believed to be seeking bids from Omnicom Group, Paris-based Publicis, Young & Rubicam, WPP Group and Aspen Marketing Group of Evergreen, Colo.
Interpublic Group of Cos. dropped out of the negotiations because of conflicts. True North Communications also is believed to have been in the mix until recently. Hometown neighbor Leo Group -- said to have been in talks with Frankel in the past -- is preoccupied with its merger with MacManus Group and isn't participating.
Frankel declined comment.
MACK MAY RISE
Frankel announced in September that it was looking for a suitor. This is the agency's second brush with outside ownership. In 1997, the agency said it would go public within a year, but it took a pass when the stock market took a temporary dive.
Agency chairman and founder Bud Frankel likely would stay on in the short term. CEO Jim Mack is a potential successor.
Mr. Frankel; his son, Vice Chairman Peter Frankel, and about 15 other Frankel executives own stock in the agency, which had $88 million in gross income and $645 million in billings in 1998. Its major clients include McDonald's Corp.,