Omnicom and Carat bid to take control of MGM

Conflict between advertising giants Omnicom and Carat intensified this week as it emerged both were bidding for control of UK media specialist Manning Gottlieb Media.

The rival organisations – which ironically are both minority shareholders in MGM – are understood to be in talks with founding partners Colin Gottlieb and Nick Manning to buy their controlling stake in the independent agency.

A fierce battle between the two groups is already expected for the 200m billings of Eurospace, the Carat-owned media-buying operation used by TBWA clients. Last week, TBWA announced it would not be renewing its contract with Eurospace, signalling Omnicom’s intentions to bundle its global media buying (MW July 3).

Sources suggest the purchase of MGM could act as a catalyst, allowing for Omnicom to consolidate its media buying. But Carat maintains it will keep its Eurospace clients, and this week claimed brewing giant Miller had pledged to stay loyal.

Any consolidation of Omnicom’s structure would have to overcome potential client conflicts in the networks, particularly in the car sector. TBWA handles Nissan, New PHD has Volvo and DDB holds Volkswagen.

Carat’s reasons for wanting to buy MGM, apart from putting a brake on Omnicom’s plans, are unclear. Carat refuses to comment.

Carat owns 19 per cent of MGM, while Omnicom’s network TBWA owns 32 per cent, which it acquired when it bought Simons Palmer Clemmow Johnson. Gottlieb and Manning own 49 per cent.

One industry observer says: “Both parties must know roughly what the other has offered because both are shareholders in MGM. It is like a game of poker where everyone knows everyone else’s hand.”

Cover Story, page 32

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