That just might be the case with Aegis, the London-based media and market-research holding company whose 14-carat jewel is Carat, a unique blend of media and interactive services run in the Americas and Asia by David Verklin, one of the industry's most sought-after talents. Last week, Publicis Groupe moved on Aegis with a takeover approach that some-perhaps including Aegis itself-expected would kick off a bidding war. Instead, by the end of a week that began with a swirl of speculation about likely bidders, there was still only one suitor.
"I don't get the feeling there's going to be a lot of crazy money being thrown at it," said Lorna Tilbian, analyst at Numis Securities.
It seems that Aegis has waited too long to put itself on the block, given that the ad industry's giants are primarily looking for organic growth and targeted acquisitions in specific geographies and disciplines in which they see more potential for growth.
The apparent lack of demand shocked not only because of Carat's prominence, but because of the growing importance of media agencies as marketers' source of strategic direction and consumer insight and as distribution networks. Mr. Verklin, in particular, is known for evangelical stylings on the power of communications planning.
Following Publicis' $2.8 billion "preliminary approach," the two largest ad holding companies dropped off the table as likely bidders.
WPP chief Martin Sorrell-the leading buyer of marketing-services companies in recent years-told investors he wasn't interested in Aegis as a whole, although he is known to have some interest in its market research arm, Synovate.
Perhaps the bigger surprise, however, was that Omnicom President-CEO John Wren showed little interest. In the past pundits have speculated that Aegis would one day end up owned by Omnicom, the world's largest holding company, which only has one major media network, OMD-albeit it this week announced a renewed attempt to bolster its second network, PHD.
No interest in research
Carat, with its suite of interactive and marketing services capabilities and the dynamic Mr. Verklin as a frontman, would seem an attractive proposition for Mr. Wren. However, a little more than one-third of Aegis' revenue comes from market research, a commodity business that Omnicom has never shown much interest in. Also, Mr. Wren is said to believe Aegis is overpriced and has stated publicly that acquisition targets in the immediate future are, by discipline, in customer-relationship management and, by geography, in Asia. Aegis is primarily a European business with 63% of its revenue coming from Europe and the Middle East, in 2004. Ten percent was from Asia and 27% is from the Americas.
That basically leaves smaller players such as Havas and, especially, Publicis. A deal for Aegis could vault Publicis past embattled Interpublic Group of Cos. to be the world's No. 3 holding company. No. 4 Publicis had 2004 revenue of $4.78 billion; Aegis had revenue of $1.37 billion; combined revenue was $6.15 billion. But even Publicis is yet to make a formal bid and Maurice Levy could decide to bail if the price is too high or if it turns into an unfriendly takeover battle.
Havas might like the idea of buying Aegis, but it is viewed by many to lack the financial clout for the deal, albeit that Havas Chairman Vincent Bollore, through his company the Bollore Group owns a 6.3% stake in Aegis.
Asked about the likelihood of a push for Aegis, an Omnicom spokeswoman said, "We don't comment on rumor and speculation." A WPP spokesman seconded that.