Young & Rubicam Inc. has appointed Bear Stearns and Donaldson, Lufkin & Jenrette here as co-lead underwriters for its long-awaited initial public offering, now set for the late first quarter or early second quarter of 1998, said sources.
Investment bankers Goldman Sachs & Co., Furman Selz L.L.C. and Smith Inc., all in New York, will also participate, sources said.
Y&R Inc. chief executive and chairman Peter Georgescu could not be reached. Executives at the investment banks all declined to comment or could not be reached.
Y&R Inc., parent of Young & Rubicam Advertising, Wunderman Cato Johnson, Burson-Marsteller and other marketing services companies, would have a total market capitalization of around $2 billion, according to analysts. "This will be the biggest agency IPO ever," said Abe Jones, a managing director at AdMedia Partners, an investment bank here. An IPO would provide Y&R with the cash to make acquisitions and other initiatives that could help it compete more aggressively with other public holding companies.
Several top Y&R executives could also potentially make millions on the IPO. "Hello, Bob Jacoby!" said one source, referring to the chairman of the former Ted Bates Worldwide, who netted more than $100 million through the sale of the agency in 1986.
Bear Stearns has close ties to Y&R Inc.: Alan Schwartz, head of Bear Stearns' investment banking division, sits on the board of Y&R Inc. and is friends with Georgescu, said sources. Bear Stearns was instrumental in putting Y&R together with San Francisco investment firm Hellman & Friedman last year when Y&R was seeking an infusion of capital. Hellman eventually bought an estimated 20 percent stake in Y&R Inc. --with Joan Voight