Omnicom talks over Snyder sale
Omnicom has emerged as a potential buyer of Snyder Communications, the acquisitive marketing services group which is seeking a price of more than $1.5bn (&£1bn).
The WPP Group and Interpublic have also been involved in discussions. The Snyder group, headed by wunderkind Dan Snyder and quoted on the New York Stock Exchange, has been involved in an aggressive acquisition drive which has seen it snap up a number of well-known brands including US hot-shop Arnold Advertising, Brann Worldwide – the largest direct marketing agency – and UK ad agency Partners BDDH.
The Snyder marketing services sale is being handled by Deutsche Bank. At $1.5bn, there are few players in the market believed to be capable of absorbing the group. Young & Rubicam is generally considered too small; Publicis recently swallowed Chicago-based marketing services company Frankel for about $170m.
WPP is believed to be particularly interested in Brann, which would dovetail neatly with subsidiary J Walter Thompson.
But both WPP and IPG face a potential conflict of interest with Snyder’s jewel in the crown: Arnold Advertising. Arnold’s main client is the US Volkswagen (VW) account, which would conflict with WPP’s Ford and IPG’s General Motors business. Omnicom handles VW elsewhere through its DDB network and is known to be Snyder’s most admired marketing services model.
Snyder’s drive to become a marketing services giant had been funded by a rapidly escalating share price. But this went sharply into reverse last July following the announcement of a company restructure – the costs of which left Wall Street less than enchanted.
About the same time, Dan Snyder announced a consortium headed by himself had bought one of the most highly rated US football teams, the Washington Redskins, for $800m, raising doubts in some quarters about his motivation and strategy.
The Snyder share price is now about $23 compared with $35 a year ago, after making allowances for the three-way restructure of the company into marketing services, dot.com and healthcare operations.
Also on the block is Snyder’s loss-making circle.com, but its healthcare business, Ventiv, is not for sale.
