Meyer mired by waiting too long

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Ed Meyer waited too long to sell Grey.

Potential bidders could fit on two of the wood benches in front of Grey's Manhattan headquarters. WPP Group is interested, and second-tier holding company Havas is a long shot. Private-equity outfits are scoping the place. But there's no sign of a bidding war.

The emperor of Grey misjudged the market. A few years ago, Mr. Meyer turned down overtures from Interpublic; it bought True North instead. Publicis coveted Grey before buying Bcom3. Now, no major holding company strategically needs Grey; rivals already have global scale.

Publicis made a prudent decision this month in pulling out as a potential bidder for all of Grey Global Group. We hope WPP will proceed with caution, for there are risks. It's assumed a new owner would slash costs to improve Grey's notoriously weak margins. But cut too far, and Grey's deservedly good reputation for account service would suffer; clients and talent could walk.

Stubborn to the end, Mr. Meyer won't sell units piecemeal. That's the wrong call. An auction of divisions like MediaCom and Grey Healthcare could raise the value by attracting more bidders. Besides, a breakup still could happen if a private-equity firm buys Grey and sells off parts.

Grey could decide not to sell-but that's unlikely. Mr. Meyer, 77, needs an exit plan. He owns 20%-plus of Grey but controls 70% of voting stock, and a filing notes he has "significant influence" over mergers, acquisitions and sales.

We hope independent directors will advocate for investors who own nearly 80%. We're not optimistic. It's Mr. Meyer's sandbox: The board is Mr. Meyer and three outsiders; he can elect all four. Mr. Meyer can decide whether to sell. If he sells, his contract could force Grey to buy his shares at market price-more than $200 million, cash. He'll be taken care of. Mr. Meyer could have gone down in advertising history as a guy who did it right. Instead, he may be remembered as the guy who did it for himself.

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