The sale of design consultancy Wolff Olins to Omnicom for an estimated 10m has broken down because senior managers within the design agency want to execute their own management buyout.
The Omnicom deal, which insiders say was 90 per cent complete, collapsed ten days ago. Omnicom had been in “on and off” talks with the design company – which has a client list that includes BT, Forte and Vauxhall – for more than two years. It has expanded into management consultancy work in the past three years.
It is understood the deal had the support of both chairman Wally Olins, who has an estimated 30 per cent stake in the agency, and deputy chairman Brian Boylan, who also holds a substantial share. But, according to some sources, other managers threatened to leave if the agency was sold, thereby reducing the value of the deal and obliging the duo to agree to a compromise with the other managers.
“The talks ended ten days ago,” says a source close to the negotiations, “the management buyout now looks like the most likely outcome. The deal with Omnicom only recently became concrete – there was a firm offer on the table – and that now appears to be dead.”
Boylan dismisses the management buyout option but admits that Wolff Olins has had talks with Omnicom and claims a deal is still possible. “There are still options on the table. We have had discussions but there has been no decision at this stage. It is premature to say a conclusion has been reached.”
In the year to the end of November 1995, Wolff Olins Business reported a pre-tax profit of 800,000 on turnover of 7.43m. “It has been reasonably profitable in 1996,” says the source involved in the talks.