Young & Rubicam Tumbles as Bidding War Prospects Fade

Shares in advertising giant Young & Rubicam (YNR Quote - Cramer on YNR - Stock Picks) plunged Monday after word emerged that its list of possible buyers had narrowed to one.

Y&R shares fell 5 13/16, or 10%, to 49 7/8 in midday trading after falling to a session low of 48 3/8. (Y & R closed down 5 5/8, or 10%, at 50 1/16.) The independent agency had reportedly been at the center of a bidding war between Britain's WPP Group (WPPGY Quote - Cramer on WPPGY - Stock Picks) and France's Publicis S.A. before WPP said Monday that talks had broken off.

"The board of WPP announces that discussions with Young & Rubicam, Inc. have terminated," WPP said in a one-line statement.

WPP, which owns ad agencies J. Walter Thompson and Ogilvy & Mather, rose 3 1/4, or 4%, to 80 5/8 in midday trading. (WPP closed up 1 7/8, or 2%, at 79 1/4.)

While WPP was reportedly prepared to pay about $65 a share for Y&R in a stock swap, Publicis may end up paying less, somewhere between $60 and $65, because it is Y&R's only remaining suitor, analysts said.