The move to merge, acquire or be acquired has been expected since London-based Cordiant announced last April that it would demerge Zenith and its Saatchi & Saatchi Advertising and Bates Worldwide advertising networks by the end of this year. Zenith will be owned by Saatchi and Bates, which will both be floated on the New York and London Stock Exchanges.
But John Perriss, chairman and CEO of Zenith, says no deals are on the table. "The general impression is that everybody is talking to everybody. Everybody's serious but nothing is at the stage which could even be described as warm."
The company's plan to become one of the world's top five media players within the next five years via a partnership was splashed on the front page of France's Le Monde newspaper this week, prompting speculation that an agreement was imminent.
"In the next two years will come the re-ordering of the media industry, but when exactly and who'll finally end up marrying who is still a very open issue," Perriss says. He adds that Zenith could broker more than one deal, separated possibly by a year or 18 months.
"Our strategic analysis doesn't differ significantly from the others'," he says. "We all believe that in five or seven years there will only by five or six large media entities accounting for 75% of the media spend around the world and we want to be one of those five." The proactive search for a partner is "not at all" defensive, he adds. "Far from it."
Linking with another organization would help Zenith grow faster, both geographically and in expanding its range of services, Perriss says. The company wants to have a greater presence in Central Europe and grow faster in Asia, in particular. It is also keen to develop its fledgling businesses in direct marketing, programming and sports marketing.
Copyright September 1997, Crain Communications Inc.