Omnicom Awaits Rival Bids, If Any

NEW YORK-As speculation focused on whether Omnicom Group would fold certain GGT Group operations-including the embattled Wells BDDP here-into TBWA International, financial observers in London were anxious to learn if a competitive bid for GGT would emerge. At week's end, however, there were no indications of an offer from WPP Group, the most likely rival bidder. GGT, which last week agreed to a $235 million cash acquisition deal by Omnicom, saw its shares drift up to 205 pence before closing at 202.5p Friday, slightly higher than the proposed 200p-per-share bid from Omnicom. Since announcing the deal last Wednesday, Omnicom has bought about 8 percent of GGT on the open market. GGT's board has a fiduciary responsibility to review any new bid, but GGT chief executive Michael Greenlees and BDDP Worldwide chief executive Jean-Marie Dru, who is replacing the retiring Jean-Claude Boulet, have warned they will leave the company in the event of a non-Omnicom transaction. In addition, it is believed they have received assurances that certain clients such as McDonald's in France would leave as well. "Someone could still come up with a higher price, but they'd be a real jerk to make a hostile bid," said Omnicom chief executive officer John Wren. Three London money management firms, Schroders, PDFM and Prudential, control 33 percent of GGT shares among them. Wren said he has not been in touch with those managers, but expects "they'll vote their shares along with everyone else." French financial institutions, led by former Paris investor Walter Butler, control another 20 percent. Butler sits on GGT's board, which unanimously approved the Omnicom offer. The holding company expects to close the deal within two months. As for speculation of GGT being folded into TBWA, which could benefit from BDDP's European offices, Wren denounced the conjecture, saying there has been no such discussion. On the same day as the Omnicom announcement, Wells chief executive Frank Assumma was dismissed and replaced by Greenlees with Steve Davis, a former president of Young & Rubicam's New York office. Davis said a "genuine desire to rebuild the Wells brand name" by his new employers was a primary motivation behind him joining the struggling agency, and that "there are provisions with my contract with Wells for Omnicom to accommodate me with a job if Wells is eventually closed." Davis spent most of his first week visiting the remaining Wells clients, including Hertz and Georgia-Pacific. Reacting to the Omnicom announcement, Steve Davis, vice president of marketing at Wells client Heineken USA, said two concerns need to be addressed this week: "Omnicom's attitude toward the A-B conflict and the viability of Wells' New York office." The bulk of Anheuser-Busch business, including Budweiser, resides at Omnicom shops DDB Needham and Goodby, Silverstein & Partners. Wren stressed that, should Omnicom be successful in its bid for GGT, the integration of Wells' clients into another Omnicom company is not a fait accompli but "one of a number of options" along with "maintaining Wells as a stand-alone unit." As for the deal's impact on GGT's other U.S. holdings, in an internal memorandum, GSD&M president Roy Spence said, "Omnicom respects our maverick attitude and culture." Dave Floren, chief executive of Martin/Williams, expressed confidence that the Minneapolis-based shop will maintain its independence. Wren, in an internal memo, addressed speculation about those and other GGT shops being consolidated into Omnicom's existing networks by noting the "flexibility" of the holding company, as evidenced by Goodby and Merkley Newman Harty, two agencies not aligned with Omnicom's three main shops. -with staff reports

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Omnicom Awaits Rival Bids, If Any

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