Following speculation yesterday that WPP is poised to make a counter-bid for media buying agency Tempus, less than a month after Havas made their offer (see Tempus Shares Soar On Havas Takeover Reports), analysts at ABN AMRO forecast that increased interest in buying into media buying may indicate a pattern for future media consolidation.
Should Havas be unsuccessful in their bid for Tempus, AMRO believes that Aegis looks an increasingly likely take-over candidate. Following the merger of Zenith and Optimedia by their parent companies, Cordiant and Optimedia respectively and the assumed take-over of Tempus by either WPP or Havas, Aegis is the only independent left in the sector able to offer a strong position in Europe.
AMRO believes that a potential buy out offer for Aegis could value the company at 150p-a-share, a 40% increase on the current price and has increased its position on Aegis from Hold to Add accordingly.
Assuming WPP is successful in its bid for Tempus, Aegis and Omnicom will become relatively minor players in the media buying sector. WPP will command a 21% share of the market whilst Omnicom (13%) and Havas (5%) will remain some way behind. At this point, Aegis would make a useful acquisition to either company’s media buying operations.
Shares in Aegis, which opened today at 115½, had fallen to 111žp by 9.15am but rallied to reach 114žp by 10.30am.
WPP shares opened at 675p but had dropped to 670½ by 10.30am after reaching a high of 679p at 9.30am.
Tempus shares opened at 592½ but had fallen to 583p by 10.30am.
