WPP Group on the Verge of Purchasing Young & Rubicam

The deal is said to be valued at least $4.56 billion.

Author:: Justin Dini
Publish date:: May 8, 2000 5:56 PM EDT

British advertising giant WPP Group (WPPGY) appears to be on the verge of acquiring Young & Rubicam (YNR) in a deal worth at least $4.56 billion, or $63.0425 a share.

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

Publicis SA

, 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

Y&R Group

, leaving the future of current Chief Executive Thomas Bell, who only recently ascended to the top spot, unclear.

WPP Group, which acquired

Ogilvy & Mather

and

J. Walter Thompson

in hostile takeovers in the late 1980s, is currently the third-largest advertising holding company in the world, behind