DaimlerChrysler: Aware of Omnicom, TN Talks

The Omnicom Group and True North Communications have resumed talks over a possible acquisition, according to a representative of a high-stakes client of both companies, DaimlerChrysler.

Discussion of a deal comes as shortly after the automaker said it planned to consolidate its $1.5 billion account, now in joint custody of TN and Omnicom, at one company. That faceoff will not be affected by negotiations between TN and Omnicom, said Mike Aberlich of DaimlerChrysler, who said the automaker was aware of the talks.

“We are still looking for consolidation and efficiencies,” Aberlich said. “We’re expecting good proposals from both [contenders].” Officials of both TN and Omnicom declined comment.

Sources said TN chairman and CEO David Bell has previously been re-buffed in his efforts to be acquired by Omnicom. The DaimlerChrysler re-view significantly alters the stakes of such a deal.

TN is especially vulnerable, as DaimlerChrys-ler provides an estimated 10 percent of the company’s revenue, compared to about 2 percent of Omnicom’s. If TN was to lose, most observers expected it would quickly get sucked up by a larger holding company anyway. Nonetheless, TN stock, which took a hit when the review was announced, dropping 5.63, had rebounded by the end of last week to 46.38.

While mitigating the potential downside of a DaimlerChrysler de-parture with a sale to Omnicom makes sense for TN, the value of TN to Omnicom, without the dominant client of TN unit FCB Worldwide, left some onlookers scratching their heads.

Omnicom’s BBDO Worldwide handles Dodge advertising, while me-dia buying and planning is handled by Omni-com’s PentaCom.

DaimlerChrysler two weeks ago said it wanted to work with a single company in an effort to save costs; the review will not involve creative presentations. The agencies will make their proposals by Oct. 6, after which DaimlerChrysler will take about a month to “analyze the results,” Aberlich said.