Calling a Truce: Dentsu Divisions to Be Restructured By J.L. Sulliva

The parent company of Lord, Dentsu & Partners and Bowes, Dentsu & Partners is negotiating a restructuring that could spin off Bowes and end an i

It is not clear whether the deal on the table would enable Bowes chairman/ceo Murray Bowes to buy the direct response agency outright from the Dentsu, Young & Rubicam Partnerships, or reduce the parent ownership to a minority stake.
Calls to executives at LD&P, BD&P and DY&RP were not returned.
The negotiations apparently grew out of the most recent quarrel between the two agencies. To protect his agency’s Nintendo account, Bowes effectively forced LD&P to abort its bid for Sega of America’s $8-10-million business. Industry sources said that before approaching LD&P, Bowes wrote to Nintendo officials and promised to abandon the Sega bid. LD&P was ordered to back out of the review.
‘The Bowes Dentsu people were pissed off’ over LD&P’s Sega bid, a source said. ‘They knew enough to raise the red flag as high as you can raise a red flag at least three weeks before’ Bowes retained attorneys and took a leave of absence in anticipation of a showdown.
Ironically, the problems stem from conflicts the parent company had hoped to avoid when it set up the L.A. shops along with Dentsu Corp. America. DCA is wholly owned by Dentsu, Inc./Japan. LD&P and BD&P are owned jointly by DY&RP.
Several years ago, BD&P resigned its direct response account with Toyota’s upmarket Lexus division to allow LD&P to pursue Mazda’s Amati business. Mazda canceled plans for the new division, leaving both agencies frustrated. Meanwhile, Lord, Dentsu’s efforts to replace that lost car account have been hampered by its Young & Rubicam affiliation and potential conflicts with Y&R’s Ford account.
Copyright Adweek L.P. (1993)