US investor move puts Interpublic back into play

Unknown-5Michael Roth’s Interpublic has done rather well recently – in its home territory of the US anyway – as it has been left to get on with business since the last time Maurice Levy of Publicis Groupe came calling 18 months ago.

But it now it’s back on the seller’s block as US ‘activist investor’ Elliott Management has bought a seven per cent stake, claiming IPG is ‘undervalued.’

IPG is only undervalued if you assume it’s to be sold. Back in 2006 amid all kinds of problems its stock was worth less than $8 a share. Now it’s over $20, valuing the business at over $8.5bn. This includes a fair bit of takeover froth.

Elliott says it wants to ” to engage in a constructive dialogue” with IPG’s board about maximizing shareholder value. This is unlikely to be about boosting the revamped FCB brand or cutting boardroom expenses.

$8.5bn isn’t that much these days in media land. It’s not much than Rupert Murdoch’s 21st Century Fox has just trousered in a tidying up deal at his Sky TV empire. WPP could certainly afford it as could Publicis, although the latter’s shareholders might be a touch reluctant to set CEO Maurice Levy free on another merger trail following the collapse of the $35bn deal with Omnicom. Dentsu, which seems to have made a good job of assimilating media buyer Aegis (maybe it’s the other way round) could also be a contender.

The proposed Omnicom/Publicis merger was announced in last year’s summer holidays. Might this year’s lazy days on the beach be disturbed by another big deal?

Wonder where Sir Martin Sorrell was planning to go for his summer holidays?

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About Stephen Foster

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Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.