Talks For Bates Have Advanced; TN Board May Consider Bid
NEW YORK–True North Communications is in “serious discussions” to acquire Cordiant Communications Group, sources said.
True North and CCG predecessor Bates Worldwide have held talks in the past, but the issue of price has been an insurmountable stumbling block until now.
The two have already exchanged financial statements, with a TN board meeting set for Jan. 18, said sources. It is believed that a bid could be discussed at that meeting.
In the latest round of talks, terms involve a mostly cash deal, since nearly 25 percent of CCG’s shareholders are U.K. institutions.
If completed, it’s unclear whether Bates, with $7 billion in global billings, would be an independent operating unit of TN. One scenario is to merge Bates with TN’s Bozell. Under that arrangement, however, conflicts with car accounts could prove problematic. Bates handles Hyundai, General Motors, Audi and Seat in various countries, while Bozell is a worldwide DaimlerChrysler shop.
Should the two agencies be combined, one observer said the executive lineup could see Leo Arthur Kelmenson as chairman, Michael Bungey as CEO and David Bell as chief operating officer. TN president Chuck Peebler is said to be aspiring to Bruce Mason’s chief executive job.
Mason had no comment on the reports on Friday. Bates CEO Michael Bungey could not be reached, but a London representative said, “We do not comment on acquisition rumors companies talk all the time.”
Since Saatchi & Saatchi and Bates Worldwide split into two separate, publicly traded companies in 1997, several potential suitors, including WPP Group and Omnicom, have eyed all or part of Bates. Bungey has long denied that he is looking to sell Bates, claiming a desire to grow the network organically.
In New York Stock Exchange trading Friday, CCG’s American Depository Receipts closed at 10 3/16, up 5/16 on volume of 12,900 shares, versus an average daily volume of 4,500 shares.
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