WPP CEO Sir Martin Sorrell has been chatting to Bloomberg Television and confirmed that his company will spend £200m on acquisitions this year (double its ‘usual’ £100m).
£100m hasn’t been the norm for very long, in 2008 WPP spent £1.1bn buying research firm TNS as well as snapping up various other trifles.
So far this year WPP has bought Commarco in Germany which owns the Scholz and Friends agency and a gaggle of digital shops including, mostly recently, 70 per cent of F.biz in Brazil.
So there can’t be that much of the 2011 budget left.
Does this mean that Sir Martin will sit on the sidelines in the current auction for Aegis-owned Synovate (French research rival Ipsos is discussing a £500m bid with Aegis) and would not be interested if Aegis itself (sans Synovate) came into play?
Well presumably it does.
Shareholders would not be happy with a bid for Synovate anyway, WPP’s research operations are lagging the growth rates of its other businesses, especially ad agencies.
But would Sorrell really be able to resist entering the fray for Aegis if the world’s biggest specialist media buyer came on the market? Especially if closest rivals Omnicom and Publicis Groupe were interested?
Publicis Groupe CEO Maurice Levy also poured cold water on the possibility of his company bidding for Aegis the other day, without ruling it out definitively.
Maybe Sorrell and Levy have decided that Aegis would just be too difficult.
Bidding would start at a chunky £2bn, way ahead of Sorrell’s self-imposed limit and a big bite for PG, which has just spent $575m on US-based Rosetta Marketing Group.
Sorrell would also run into market share problems with regulators as WPP already owns MediaCom, Mindshare, MEC, Maxus and outdoor specialist Kinetic in the sector. Aegis owns Kinetic rival Posterscope so WPP could hardly own both and with them about 90 per cent of the outdoor market.
Another issue is the presence of Havas boss Vincent Bollore on the Aegis share register with 26.5 per cent, which would give him first mover advantage.
So should we forget about a really big deal for WPP this year?
Maybe not yet.