"There are discussions taking place but nothing is confirmed," said Laurence Mellman, United's chief operating officer.
Co-managing partner resigns
Robert Campbell, who was brought in as United's joint managing partner alongside Jim Kelly last year to reinvigorate the London shop, is set to resign. Mr. Kelly is expected to take up a role at another WPP agency. The pair, known for their entrepreneurial talents, were brought in a year ago to boost the agency's performance.
Mr. Campbell had no comment.
Grey's London office is looking for a CEO after Tamara Ingram stepped from that post in January to devote herself fully to running Procter & Gamble Co.'s global business for Grey and WPP. It is not known if this is one of the roles being considered for Mr. Kelly. Grey executives in London declined to comment on a merger with United.
United's London office lost the $150 million Sky satellite TV account, which represented 70% of the agency's billings, in December 2006. The loss instigated discussion about the office's future and how to revive its fortunes. Messrs. Campbell and Kelly were believed to be considering options such as a merger with a digital shop or at least refocusing on a new-media agenda.
Final stages of talks
However, they were unable to agree with Mr. Sorrell, WPP's chief executive, about how to restructure the agency. According to insiders, a merger with Grey is the preferred option and is in the final stages of negotiation. Messrs. Campbell and Kelly each own 13% of United, London.
The London office has eight accounts and about 30 staff members remain. The biggest account is an assignment for the Department of Health. Other accounts include those for the Early Learning Centre, the free daily Thelondonpaper and Masterfoods' Tracker snack bars.
Strength in other markets
The United network lost Alfa Romeo last year when the Italian carmaker's account was shifted into WPP sibling Young & Rubicam. But there is still some life in the network, or at least in individual agencies: the Italian office in Milan won the Vodafone account this week and Berlin Cameron United is a finalist -- in fact, the only contender -- in the $100 million Heineken Light review in the U.S. United's Madrid, Buenos Aires and Seattle offices are also doing well.
Mr. Mellman said United is profitable, although he acknowledge the network lacks one thing most agencies collaborating as a network have: one client in multiple offices.
Still, he said, "There are no plans to shut down the network."