Chiat/Day for sale? TBWA cited as strategic fit

Jay Chiat has been putting out feelers in the ad communities on both sides of the Atlantic in an attempt to evaluate interest in a sale of all or parts of the venerable, but debt-ridden Chiat/Day network, sources said.On the heels of lengthy merger talks between Chiat/London and several British shops including Howell Henry Chaldecott Lury, sources now believe that C/D's U.S. operation is also ripe for a sale."We understand that (C/D is) an agency for sale," said one top-ranking source at a global agency.In the U.S., sources are quick to single out Omnicom Group, the farflung holding company that's parent to three worldwide agency networks--DDB Needham, BBDO and TBWA--as a possible buyer.In fact, Jay Chiat, chairman/ceo of Chiat/Day, has had at least one informal discussion with Omnicom ceo Bruce Crawford which one source characterized as "exploratory.""Omnicom has conversations with people all the time, but they are more along the lines of "What if . . . ' than anything definite," said Crawford when asked if Omnicom has talked with C/D. "There are no acquisitions imminent. Nor are there negotiations going on right now to purchase Chiat/Day."Jay Chiat did not return phone calls seeking comment. Bob Kuperman, president/ceo of C/D's L.A. office, said, "There is no truth" to the Omnicom/Chiat rumor. However, sources close to both companies are convinced that both Omnicom and C/D will eventually try to hammer out a deal."I fully expect it to happen," said one former Chiat/Day executive.Crawford stressed that Omnicom is not interested in acquiring a fourth, free-standing agency network. He said for an acquisition to work, it would have to make a strategic fit with one of Omnicom's three existing networks.Observers believe that philosophy wouldn't necessarily derail an Omnicom/Chiat deal. In fact, many executives close to both companies believe, should a deal go through, C/D and TBWA could be merged together fairly easily. "It's a perfect strategic fit," said one executive.TBWA and C/D are both creatively driven shops and geographically, the agencies could complement each other. There are no significant client conflicts. In fact, Nissan could be the magnet that's drawing C/D and TBWA together. C/D handles Nissan in the U.S. and TBWA handles the car in Europe.Dick Costello, TBWA's president/ coo, said TBWA and C/D often talk about Nissan and that "we're great admirers of their work" but that there are no discussions underway.Rumors linking Chiat/Day to a sale have escalated as the agency has struggled to stay profitable. Client defections and an iii-timed international expansion plan have left C/ D about $30 million in debt.Press reports have speculated that C/D might be sold to Creative Artists Agency and/or to FCB. But CAA chairman Michael Ovitz insisted he has no intention of buying an agency, and FCB executives said that their Mazda client would not be able to co-exist with C/D's Nissan account.Copyright Adweek L.P. (1993)

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Chiat/Day for sale? TBWA cited as strategic fit

Alison Fahey

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Alison Fahey