An announcement of the agreement, which was widely reported Monday by various newswires, is expected in the next several days. A Y&R representative declined to comment.
The deal, which if completed will create the world's biggest advertising company, would consummate months of on-again, off-again discussions between the two companies. A little more than a week ago, talks
broke down over price and compensation for senior Y&R executives.
Under the terms of the agreement, Y&R stockholders will receive 0.835 share of WPP's stock for each Y&R share, according to published reports. That offer would represent a 16% premium over Friday's closing Y&R share price of 54 1/8.
Both Y&R and WPP shares declined Monday amidst a swirl of reports regarding a potential coupling. Y&R fell 4 5/16, or 8%, to close at 49 13/16. WPP's American depositary receipts declined even further, falling 8 5/8, or 11%, to close at 66 7/8.
The French advertising company
, which emerged only in the last few weeks as a potential suitor, said Monday it had decided against making an offer for Y&R despite being invited by Y&R to do so.
Y&R Finance Director Mike Dolan will reportedly head the
, leaving the future of current Chief Executive Thomas Bell, who only recently ascended to the top spot, unclear.
WPP Group, which acquired
Ogilvy & Mather
J. Walter Thompson
in hostile takeovers in the late 1980s, is currently the third-largest advertising holding company in the world, behind