By Judy Warner
BOSTON–A desire to cash out of Arnold Communications while the agency is flying high led Ed Eskandarian some months ago to begin seriously considering his options.
Last week, industry sources said the chairman and chief executive officer of Arnold had signed a letter of intent to sell the $650 million shop to a nonadvertising related company.
Eskandarian would not comment when asked whether a letter of intent had been signed.
‘I’m not going to discuss any of this,’ Eskandarian said flatly last week.
Even so, the 60-year-old executive has been candid about his desire to retire from the business before turning 65 and cash out of the advertising agency that he built over eight years into the country’s 21st largest with billings of $650 million and revenues of $75 million.
Observers say the methodical Eskandarian has been driven in recent months to formulate a plan to cash himself out of the agency both out of personal desire and because the window of opportunity to do so may be narrowing.
The shop has recently lost several clients, including the Playskool division of Hasbro in Pawtucket, R.I., which moved its estimated $35 million account to Grey Advertising in New York in part for global capabilities.
‘The issue Ed has is that, among the big agencies, there are really two big account categories: autos and food,’ says Larry Weber, who recently sold his public relations company in Cambridge, Mass., to Interpublic’s McCann-Erickson in New York and who has known Eskandarian for years. ‘Arnold has both so the question is, ‘Where does Ed turn?’ ‘ Weber said.
At one time, Eskandarian’s exit strategy was believed to lie with Omnicom’s DDB Needham.
Because of Arnold’s substantial relationship with McDonald’s franchisees, the shop was seen as a key ingredient in a plan by DDB to build a second agency network for the fast food chain.
At the very least, DDB was said to have the right of first refusal should Eskandarian sell the shop.
That plan is no longer under consideration. ‘Omnicom is not interested in buying Arnold,’ said Omnicom chief executive officer John Wren last week.
Selling out to a nonadvertising company would assure Eskandarian’s continued involvement for at least three years with a minimum of upset to the shop’s culture in the near term, sources said last week.
–with Michael McCarthy
Copyright ASM Communications, Inc. (1997) ALL RIGHTS RESERVED
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