Monday, July 16, 2007

Another super merger coming?

Aegis and their Isobar group must be one of Google's biggest customers. They may be Google's biggest.

Aegis is one of those marketing superbrands that own a enviable collection of other agencies. They own the search firm iprospect and acclaimed agency Glue.

Companies similar to Aegis would be Omnicom, Havas and WPP (who bought the Search firm 24/7 Real Media).

Times have been... interesting for Aegis recently. One of their key share holders in a chap called Vincent Bollore. I think he has about 25%~29% of Aegis. Bollore, doesn't, however have any presence on Aegis' board.

Is that a bit odd?

There's a reason for it - Bollore also owns Havas. Havas is a serious competitor to Aegis. Aegis' current board reckon there's a serious conflict of interest there. However, while Bollore has these shares we tends to petition for board access. Let's not use phrases like "civil war" as that's far too dramatic but there are certainly hugely significant votes on the subject.

As you might expect there has been the natural speculation that Aegis and Havas might merge [free sub required].

They might. I don't think that's the mega merger the market has in mind, though.

Partly due to these difficulties and also due to the decline of traditional media (against the rise of digital media spend (yay, go team digital)) Aegis' shares have been under performer. They should be higher than they are.

In other words; it's a good time to buy shares in Aegis.

The City reckons it's such a good time to buy shares in Aegis that someone might buy the whole company.

Likely buyers would have to be agencies like Publicis or WPP. If WPP buy Aegis then 24/7 and iProspect would be brothers. If Publicis buy Aegis then Starcom, Isobar and iProspect will be brothers.

Here in the UK (and elsewhere in the world) Google incentives media spenders to grow their AdWords and try new things. This incentive is a form of a rebate - money back from Google.

If there was a merger of, say, Aegis and Publicis then I would wager that Google UK would find themselves paying hundreds of thousands of pounds to the new company.

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