By Alex Gavrish, Etalon Investment Research; author of "Wall Street Back To Basics"
Complex merger of Omnicom and Publicis is cancelled
Last month advertising firms Omnicom Group Inc. (OMC) and Publicis Groupe SA EPA:PUB cancelled their merger. A highly complex transaction was in progress for many months. It was finally cancelled due to many issues, among them control of the company and executive roles, integration difficulties, and delay of regulatory approvals in China. It is reasonable to assume that Omnicom Group Inc. (OMC) and Publicis Groupe SA EPA:PUB will actively look for other strategic options and M&A opportunities.
Interpublic Group takeover speculation
Company profileInterpublic Group of Companies Inc (IPG) is one of the worlds’s premier global advertising and marketing services companies. Through45,400 employees in all major world markets, its companies specialize in consumer advertising, digital marketing, communications planning and media buying, public relations and specialized communications disciplines. Company’s agencies create customized marketing programs for clients that range in scale from large global marketers to regional and local clients. Comprehensive global services are critical to effectively serve company’s multinational and local clients in markets throughout the world, as they seek to build brands, increase sales of their products and services and gain market share.
Current valuationAs of June 6th, 2014, Interpublic Group of Companies Inc (IPG)’s market capitalization was $8,261 million and enterprise value equaled $9,157 million, Company is currently valued at an EV/EBITDA multiple of x11.3 FY 2013. Free Cash Flow equaled $420 million in FY 2013 which represents a yield of 5%. Company pays a quarterly dividend of $0.095 per share which provides an annual yield of 1.96%. During FY 2013 Interpublic repurchased $482 million worth of shares and recently authorized an additional share repurchase program of $300 million. Despite recent takeover rumors and media reports, we believe one should take a cautious view and not make investment decisions based solely on the temptation created by media and market rumors. The post The Interpublic Group: Should You Gamble On Takeover Rumors? appeared first on ValueWalk. -By Alex Gavrish
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