Snyder Buys BDDH

Snyder Communications’ move to acquire its first overseas agency and a $100-million share repurchase plan may have fueled chairman Daniel Snyder’s global ambitions. But neither effort propped up the company’s flagging stock price.
Snyder’s stock was trading at around $33 at press time, continuing a recent decline after trading as high as $54 this year. “When we think our share price is inappropriately valued we’ll buy it back,” Snyder said.
That maneuver is commonly taken by publicly traded companies as a way of “hyping” their stock price, analysts said.
Snyder will not “aggressively” buy back its shares because it could impede the holding company’s ability to make acquisitions, according to Fran Bernstein, an analyst with Merrill Lynch Co. in New York who follows Snyder.
Nor did Snyder’s purchase of London-based Partners BDDH immediately bolster the stock’s value. Analysts saw the BDDH buy as too insignificant to affect Snyder’s earnings, paving the way for additional acquisitions.
Snyder hailed BDDH as one of the largest independent agencies in Britain; it ranked 32nd among the top 50 U.K. shops last year, according to Campaign. The shop has about 90 staffers and reported annual revenue of $7 million from clients such as Harley-Davidson, The Guardian and Mercedes-Benz. The auto companies currently served by Snyder’s ad units –Arnold Communications handles Volkswagen of America–presently pose no conflict, said BDDH principal Nigel Long. “We cleared the deal with Mercedes,” he said.
BDDH will be operated by Snyder as a unit of Arnold. Both Snyder and Arnold chairman Ed Eskandarian see the London acquisition as a significant first step toward building a global network under the Arnold brand that should reach $1 billion in billings by early next year. Arnold expects to end 1998 with billings of $850 million, agency executives said.
What sets Snyder apart from other agency holding companies is its commitment to building a single agency brand under the Arnold name rather than running multiple agencies as Interpublic Group of Cos. and Omnicom do. London-based BDDH will operate with Arnold in its name. Its five principals, all of whom held equal shares in the agency, will report to Eskandarian.
“Snyder has a unique and interesting strategy that will be attractive to a whole new category of advertisers: multinational clients with single messaging requirements,” said Boston-based review consultant Skip Pile of Pile and Co. BDDH is also part of the Elan Network, a group of six independent shops in Europe that use each other’s resources. Long said it was “probable” Snyder would pursue acquisitions from among this field.
While no Arnold clients are ready to make the leap, agency executives say there are opportunities to work for existing and new clients on both sides of the Atlantic.
Snyder expects to remain what he calls “very aggressive” on the acquisition front, not just overseas but domestically. Sources last week said Snyder was close to finalizing at least two deals on the West Coast. Both Snyder and Eskandarian declined comment.
Speculation has risen in recent weeks that Dan Snyder is preparing his company to be acquired or looking for an executive other than Eskandarian to run its creative services group of companies. Snyder denied both rumors, adding: “I am 100 percent committed to Ed. He has a contract for another two and a half years, and I expect maybe even longer.”
Separately, Snyder is part of a group bidding on the Washington Redskins and a decision is expected by year’s end. When asked for his view, Eskandarian–a longtime friend of New England Patriots owner Bob Kraft–quipped: “The only thing I want out of that deal is a luxury box.”