The question: Who will be next?

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Each agency acquisition brings up the question: Who's next?

Holding companies such as Grey Global Group and Cordiant Communications Group are increasingly mentioned, along with the last few independent holdouts of scale, such as Kirshenbaum Bond & Partners, and some marketing-services shops.

"They should all go in theory," said Lauren Rich Fine, advertising-agency analyst for Merrill Lynch & Co. With the softness in the ad market, the time is right for more consolidation, she said.

Grey has been speculated to be targeted by Interpublic, Havas Advertising and Publicis Groupe. Insiders note 73-year-old Chairman-CEO Edward Meyer-the company's largest shareholder-is far past traditional retirement age and may want to cash in his shares at a time when his agency's stock is highly valued.

With Interpublic focused on the True North deal, insiders have turned their attention back to Grey/Publicis, a pairing that would unite two of Procter & Gamble Co.'s biggest agencies. Publicis Chairman-CEO Maurice Levy denied he is interested in Grey. A Grey spokeswoman said the agency does not comment on the topic. Grey's stock closed March 22 at $670, below its 52-week high of $760.

Cordiant has also been the subject of speculation since the former Bates Advertising separated from Saatchi & Saatchi in 1998 and both began trading separately. The speculation increased again after Saatchi was acquired by Publicis in 2000; Cordiant is negotiating with Publicis regarding the future of Zenith Media, the media agency co-owned by the two former siblings. Talks gave rise to rumors that Publicis was seeking to acquire all of Cordiant.

Cordiant Group Chief Executive Michael Bungey maintains the company is prepared to remain independent, but will hear offers, especially if they are high-priced.

The acquisition of Deustch, New York, by Interpublic last year put Kirshenbaum Bond at the top of the independent target list in the eyes of acquirers. Co-founder Richard Kirshenbaum said through a spokeswoman that the agency is not for sale.

With the agencies increasingly seeking to boost their non-advertising offerings, it's disciplines such as direct marketing, promotion and public relations where targets are still abundant and reasonably priced

"Harte-Hanks would be a natural" acquisition for a holding company seeking to add nontraditional offerings, said Ms. Fine. The publicly owned direct and interactive company issued earnings warnings last month for the first quarter, stating that retail and technology clients-responsible for 32% and 22% of its direct-marketing revenue, respectively, in 2000-are delaying spending on programs to cut costs.

Another possible target is Halo Industries, Niles, Ill., which placed its marketing-services shops on the selling block after a financially troubling 2000 in which it reported a net loss of $49.9 million. The company wants to pay off debt and focus on its core promotion-products business. Also coveted is Halo's hip, marketing-services agency Upshot, Chicago.

The one blue chip left in PR is Edelman Public Relations Worldwide. With the acquisition of Shandwick Worldwide and Golin/Harris Communications by Interpublic in 1999, Edelman is now the largest independent, with billings of $210 million and a client list that includes Motorola, Microsoft Corp. and Tricon Global Restaurants.

But Ms. Fine doubts Edelman will be picked off easily. "[Chairman Daniel J.] Edelman has said he doesn't believe it needs to be consolidated."

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