WPP boosts network in 13m share raid on CIA
WPP Group has bought a 14.6 per cent stake in the CIA Group from former CIA vice-chairman Marco Benatti, in a move that could eventually result in a global alliance of the two advertising media groups.
The 13m share raid, involved 6 million shares bought at 170.5p on the market, and a further 1.2 million from a placing at 150p which must be paid for within 12 months.
Industry observers say the acquisition is part of Sorrell’s plan to strengthen the intended media alliance between WPP agencies
J Walter Thompson and Ogilvy & Mather. WPP claims the stake is simply “an investment”.
However, insiders at O&M and JWT see the acquisition as a move to speed up the media merger, which is understood to have been delayed because of wrangling over control.
A global strategic alliance between CIA, which wants a stronger US presence, and WPP’s agencies, which need volume across Europe, is likely to accelerate other agency network media mergers.
WPP has lost a number of media accounts to CIA, including Shell. CIA chairman Chris Ingram is report ed to be “relaxed” about the deal.
The purchase means WPP will be the second-biggest shareholder in CIA after Ingram. CIA has 41 million shares in issue, of which Ingram owns more than 12.3 million – a 30 per cent stake.
Benatti is understood to have been frustrated by the creation of a European board in October. It included David Reich, Michael Elms and Mainardo de Nardis, who took responsibility for the UK and the Netherlands, Italy and Spain, France and Germany respectively. Reich was made non-executive director and chairman of the European board.
Benatti did not have a position on the European board. Earlier, Marketing Week disclosed that Benatti was planning to sell his stake in the company (MW September 13 1996). Benatti disagreed with Ingram on the strategy of the company.
