Omnicom tops up takeover war chest with $2.5bn

holding_bwsmallWe noted the other day that WPP had borrowed a large slug of money over 30 years at 5.6 per cent (we don’t know how much) and now it emerges that rival Omnicom (left) has renewed a $2.5bn credit facility (with the option of adding another $500m) to 2019.

Omnicom has no borrowings against the facility at the moment – which suggests it’s a war chest.

Omnicom, of course, is still nursing its wounds from the failed $35bn merger with Publicis Groupe although, according to the two companies’ recent earnings figures, PG has suffered the more.

It also emerged recently that US ‘activist’ investor Elliott Management has bought a seven per cent stake in US rival Interpublic, effectively putting the owner of McCann and FCB into play. Elliott, which says it wants talks with IPG boss Michael Roth, is not a long-term investor.

IPG, whose shares have recovered from $8 to $20 in the past few years, is valued at over £8.5bn. WPP and Omnicom have both given themselves some of the firepower needed to try to buy it, should they so desire. Publicis Groupe too has low borrowings and is maybe a better fit with IPG. Dentsu, which bought media buyer Aegis for $3.6bn a couple of years ago, still lacks a big US creative agency.

IPG isn’t the only deal in town, of course. There’s Havas, which is losing the race to keep up with its bigger marcoms rivals, Miles Nadal’s MDC Partners which has some plum agency brands although it doesn’t make a profit and independent PR giant Edelman.

Both Omnicom’s John Wren and PG’s Maurice Levy would surely like to show they can pull off a big deal before their shareholders put them out to grass. WPP’s Sir Martin Sorrell might fancy another one.

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