Miles Nadal, CEO of much-smaller holding company MDC Partners --
parent of agencies such as CP&B, 72andSunny, Anomaly and KBS+ -- was wholly upbeat about the the
merger, presumably because it makes his very U.S.-focused and not
terribly diversified portfolio of agencies look like a more
attractive acquisition target.
The creation of Publicis Omnicom Group is "a brilliant move for
them strategically. It settles each one's issues with a
complementary strategic partner," said Mr. Nadal. "It won't be
without any fallout, but it ultimately will be a very successful
move for them."
As for MDC, "it's a huge win," he said, citing new-business
opportunities due to both client conflicts and client concerns that
this mega merger will distract agencies from producing great
"It extends the lifespan and runway we have," he said. "MDC has
a longer runway for oversize growth. The opportunity to continue to
build scale and increase profitability is better than ever."
And, he added, "We will have far less competition for M&A
... especially as [the industry] focuses on the consolidation of
Analysts are now watching Interpublic closely. "With news of
Omnicom and Publicis merging, Interpublic will immediately be
considered to be in play by investors," said Pivotal Research
analyst Brian Wieser, who revised his year-end target stock price
for IPG to $21 from $16. "Our revised price target is determined by
maintaining our business profile estimates, but by applying the
costs of capital embedded in our price target for the most likely
But he also suggested Havas could be an acquirer, given the
Bollore family's commitment to the industry, as well as Dentsu, if it wants to be viable outside
Japan (its dominance there will remain even after Publicis and
Omnicom merge). "It will need a stronger presence in the U.S. and
Europe," he said. "Meanwhile, WPP ... will undoubtedly reconsider
the limits to scale it may previously have assumed. All of this is
to say that we now have as many as three potential acquirers for
IPG, which offers the best solution for each of the companies who
might want to buy it."
Neither Interpublic nor Dentsu returned a request for comment by
"There are two likely scenarios," Results International's Mr.
Collins said about Interpublic. "One: It could be seen as a
possible takeover target. Two: it remains independent and picks up
some of the major client accounts that are likely to fall out from
this huge deal. Either would be good for IPG shareholders."