E-partners seek more i-deals

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The announcement last week that Omnicom Group would team with Pegasus Partners II LP to form an e-services company with stakes in Agency.com, Organic and Razorfish left questions as to Omnicom's intentions for the struggling shops.

In the release, Omnicom and Pegasus said, "Our objective in forming the company is to maximize consolidation and other strategic opportunities among companies in the currently depressed e-services consulting and professional services marketplace." But Omnicom Chief Financial Officer Randall Weisenburger downplayed the release and the ensuing speculation that some sort of consolidation among the three shops was afoot.

"I would think that the probability of these three companies being one network would be unbelievably remote," he said.

The deal, which hasn't been finalized, calls for Omnicom to contribute its minority stakes in the shops to the new company.

Omnicom owns about 31% of Agency.com, 17.3% of Organic, and 12.1% of Razorfish. The stakes late last week were worth less than

$30 million. When Agency.com went public in December 1999, Omnicom's then-45.5% stake topped more than $1.3 billion.

Mr. Weisenburger wouldn't comment further on what Omnicom gets from the deal, but indicated he hoped the agency holding company and three shops could continue their relationships.

Pegasus is an investment fund of Pegasus Capital Advisors, a Greenwich, Conn.-based institutional investment firm. Pegasus referred calls to Omnicom.

The new e-services company could be in a position to take i-shop holdings and buy other slumping Internet assets. It's unclear, though likely, that Omnicom will own a stake in the new company.

Pegasus has helped repackage other companies' assets. For example, trade publisher Miller Freeman early last year put some old-economy assets-various paper-industry titles-into a joint venture with Pegasus to create a Web-based business exchange, paperloop.com.

Mr. Weisenburger said that despite the burst Internet bubble, Omnicom could still benefit from its ties to the companies.

"Hopefully, [the deal] is positioning us to be in a better position to take advantage of opportunities in the marketplace," he said. He also pointed to talks between Omnicom's BBDO Worldwide and Organic, made public last month, as evidence that Omnicom would maintain its i-shop relationships once the Pegasus deal was done.

Agency.com couldn't be reached at deadline; Organic and Razorfish declined to comment.

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