By Published on .

Turn Signals

WHAT'S THE DEAL: Grey Global agreed in September to sell to WPP for $1.52 billion in cash and WPP stock. Risk: The value at closing would fall if WPP shares declined. Reward: gains if WPP rose. WPP stock has soared since the fall, hitting the highest point March 4 since 2001. The deal closes today; Grey Chairman-CEO Ed Meyer's timing was perfect. This is in contrast to the 2001 sale of True North Communications to Interpublic; as Interpublic shares slumped, the deal's value fell from announcement to closing. Interpublic stock given to True North shareholders has plunged since then. How the deals' values changed over time:

Admarket 50

HIGH TIME: The AdMarket hit its highest point since late December, recovering early-year losses to show a 1.7% gain. For the week, 43 AdMarket issues were up; seven fell. Univision topped the charts on improved results. Havas hit its highest level since February 2004 as speculation grew on a possible takeover move by investor Vincent Bollore.

Grey Global Group fell 10.6%. The drop is no surprise. Grey holders had until March 3 to request cash, WPP stock or a mix in the sale to WPP Group, set to close today. WPP will buy half the shares for $1,005 cash and half for stock worth about $1,300; that's a blended value of $1,152 a share. The smart money asked for stock; anyone who bought shares March 4 probably will get mostly cash. Grey stock fell March 4 to $1,011 to reflect that.

Advertising Age and Bloomberg's AdMarket 50 index of 50 top publicly traded marketer, agency and media companies for the week ended March 4 based on stock trading data supplied by Bloomberg financial news service. All comparisons are vs. closing prices Feb. 28. Full data available on Bloomberg terminals under index BAAX.

Most Popular
In this article: