Updated from 2:40 p.m. EDT
Publicis
SA, the French advertising company, is expected to announce as early as Tuesday that it has agreed to acquire
Saatchi & Saatchi
(SSA)
, the British-based advertising agency.
Shares of
Saatchi & Saatchi
(SSA)
soared 30% Monday after it said it was in negotiations that could lead to its sale.
Although Saatchi did not identify its suitor, several news organizations including
TheStreet.co.uk
, the British affiliate of this Web site, reported that Publicis was making an all-stock bid for Saatchi valued at about $1.5 billion.
The deal would be the latest in an industry that has been roiled by a recent wave of consolidation. Last month,
Young & Rubicam
(YNR)
agreed to be acquired by the
WPP Group
(WPPGY)
of Britain, and earlier this year
Havas Advertising
agreed to buy
Snyder Communications
(SNC)
.
Saatchi's American depositary receipts jumped 7 11/16 to close at 33 1/16 Monday.
An agreement by Publicis to acquire Saatchi & Saatchi would come just weeks after the French made a failed attempt to buy Young & Rubicam.
Saatchi said earlier Monday that it had been approached by another company, and that the talks "may or may not result in a merger offer being made."
Other possible suitors including
Grey Advertising
(GREY)
and
Havas Advertising
, either declined to comment or denied that they were in discussions to acquire Saatchi & Saatchi.
The news involving Saatchi comes in the midst of management
turmoil at one of its biggest clients,
Procter & Gamble
(PG) - Get Report
, the Cincinnati-based packaged goods giant. That company ousted its chief executive earlier this month and warned that profits in the next two quarters would miss forecasts. P&G is also reportedly seeking to reduce the fees it pays its ad agencies, perhaps as soon as July 1.
