French Twist on Arnold Sale?

Should Snyder Communications’ talks to sell its holdings, including Arnold Communications, to Havas Advertising Group of Paris succeed, Ed Eskandarian’s fortunes would again be tied to the French–and to an agency he walked away from 11 years ago after selling HBM/Creamer to WCRS Group PLC.
One source described as “delicious irony” the possible sale of Snyder to Havas, the world’s sixth largest agency holding company. Such a deal would result in Arnold becoming the lead agency in the U.S. for Havas’ so-called Campus network.
While Havas operates agencies in the U.S. under the Euro RSCG Worldwide umbrella, it’s looking to develop a second agency network around Campus, which currently consists of five agencies in Europe, including London-based WCRS.
Making Arnold the lead agency in the U.S. for Campus would also set it apart from Havas’ other main shop here, Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York. By having Arnold report through Campus and not Euro RSCG, potential client conflicts–Volkswagen of America at Arnold and Volvo of America at MVBMS, for instance–could be avoided, sources said.
Euro RSCG is not interested in acquiring any more general ad agencies but is focusing on nontraditional ad and marketing services agencies, said chairman Bob Schmetterer. “Havas is getting more active in the U.S.,” Schmetterer noted, adding, “Campus is interested in expanding in the U.S.”
WCRS today is a stripped-down version of the aggressive acquisitor that in 1986 established its U.S. presence by first buying HBM/C and a short time later Della Femina Travisano & Co. in New York. In June 1988, both agencies were merged into one–Della Femina McNamee. The result was disastrous.
The Boston office of DFM hemorrhaged accounts and people, including Eskandarian, who walked when his contract was up. Eskandarian started over by buying Arnold, then a $50 million shop, and went on a buying spree. Eeventually he bought his former agency, which by then had freed itself from WCRS.
In 1998, Eskandarian sold Arnold to Snyder in a pooling of interest deal valued at $120 million. One top executive at Arnold said a sale to Havas would help the Boston shop achieve the goals originally outlined by Snyder. That is, it would be able to remain autonomous and build an international network. “To be in the top 10,” this executive said last week, “we need global.”
Eskandarian could not be reached last week and Snyder executives did not return calls.
Havas would pay what many consider an exorbitant price, in the range of $20-24 a share, for Snyder’s main holdings, which include Arnold and its related Internet company, Circle.com, Bounty SCA Worldwide and Brann Worldwide.
“Havas is desperate to do something big. They will be ready to pay any price just for the sake of doing something big,” said one source.
Publicis chairman Maurice Lƒvy, who, when asked last week whether he was interested in Snyder, said “We have been, and we are not now.” Two weeks ago, Publicis bought Minneapolis-based Fallon McElligott, but that isn’t why Lƒvy cooled toward Snyder. “When we started to be interested [in Snyder], it was trading at $12-14 a share,” but price alone didn’t dissuade him.
“First, it’s mainly a collection of operations rather than a group; and second, because the price is far too high … with a capital H. It’s enormous,” Lƒvy said. “One way of looking at things is that at this price this is not the right thing for our corporation. Nothing against Snyder or the people of Snyder, but there is no reason for us to buy.”
Sources said final bids for Snyder were due last Friday. It is believed that the top three holding companies are not keenly interested. K