Hal Rebuffs Interpublic To Go With Levy’s Publicis

Riney Sells Rather Than Be Another ‘Medium-Sized Agency in Limbo’
SAN FRANCISCO – Concerned over the viability of independent, midsize agencies, Hal Riney last week agreed to sell his 12-year-old shop to Publicis for an estimated $90-100 million in cash.
“With the tremendous amount of consolidation going on it didn’t make sense to continue as a medium-sized, independent agency in limbo,” the chairman of Hal Riney & Partners said last week. He added that the $702 million shop has lost pitches – Apple Computer is a recent example – and has been forced to turn down business because it could not handle international duties.
Sources said that agency president Scott Marshall’s compensation package has an incentive attached to the sale of the agency. However, as part of the deal, Riney and Marshall have agreed to stay on for at least three years, sources said.
Pending final approval, the San Francisco-based agency (and its Chicago office) will be renamed Publicis-Hal Riney & Partners. The agency will operate separately from Publicis’ offices in New York and Dallas, said Maurice Levy, Publicis chief.
Riney said Interpublic Group, which shares General Motors as a client, also expressed interest, but “We didn’t want to be another bead in IPG’s necklace.” IPG did not return calls by press time.
Riney, 65, is not the only ad executive who sees a potentially bleak future for many midsize agencies. Many have sold out recently amid predictions that global account consolidations will leave behind medium-size shops without international reach.
The acquisition of Riney will not be the end of Levy’s interest in U.S. shops [Adweek, April 27]. He said he will target Eastern agencies next. “To be a decent player and attract good clients, we must reinforce our East Coast presence,” Levy said. Publicis already owns Publicis/Bloom in New York. Levy declined to name any targets, but said he is “in contact” with several U.S. shops.