Omnicom’s BBDO takes a majority stake in Clemenger Group – 25% to remain local
Omnicom’s BBDO is increasing its stake in Clemenger from 46.67 percent to 73.67 percent, as part of a strategic push into the Asia-Pacific region. The agreement reached today will position Clemenger as a key player in Omnicom’s ambition to be the leading advertising and diversified marketing force in the Asia-Pacific region, building on its strength in Australasia where the Clemenger team has been highly successful for many years.
Robert Morgan (left), executive chairman of Clemenger said: “We believe this Proposal will be a win, win strengthening the ties between the businesses will dramatically enhance our Group capabilities. We regard this move as a natural progression born of deep cultural respect and strong relationships at every level. The extremely strong affinity we share comes from knowing each other and successfully working together for many years. It is particularly gratifying to see the original architects of the relationship going back to 1973 Bruce Crawford, now Chairman of Omnicom and Peter Clemenger still linked to the Companies and both being involved in us taking this next step.”
Clemenger, an unlisted public company, has entered into a Share Implementation Agreement (SIA) with BBDO where BBDO proposes to acquire one Clemenger share for every two Clemenger shares on issue not held by BBDO. The offer is $6.43 cash per share.
Implementation of the Scheme requires the approval of both shareholders and the Federal Court. Shareholders will be asked to vote on the Scheme at a shareholders meeting to be held later in the year.
Morgan said the board believes it is compelling for employees and shareholders with the directors unanimously recommending acceptance.
John Wren, President and CEO of Omnicom said Clemenger has developed significant capabilities beyond general media advertising.
“The Group includes many of the marketing service capabilities included in Omnicom
worldwide. We plan to tap into Clemenger’s knowledge and expertise to help develop
our business in the Region,” he said. A key ingredient to this Proposal is that we would like 25 percent of the company to remain in local ownership. A large element of Clemenger’s enduring success has been employee equity participation. We believe perpetuation of employee ownership is fundamental to their success. Continued local ownership is imperative to maintain the great team of people which the Group employs. We are keen on sustaining momentum by adding additional support and access to capital,” said Wren.
Andrew Robertson (left, pictured by CB in Cannes this year), president and CEO of BBDO Worldwide, said this is all about setting both parties up for accelerated growth.
“For 37 years BBDO Worldwide has had an incredibly effective partnership with Clemenger BBDO and the Proximity agencies in particular. It has worked well for our global clients, and the work done by the very talented people in these agencies has helped strengthen our reputation, and solidify our position, as the world’s most awarded network,” he said.
“For as long as this partnership was supported by a minority ownership position, it was neither in the interests of BBDO Worldwide nor of Clemenger Group’s other shareholders to leverage the extraordinary companies and individual talents that make up the Group outside the borders of Australasia. Clemenger has built a world class portfolio of companies, across all disciplines, and led by extraordinary people. With this move it will be in everybody’s interest to leverage these companies and this talent dramatically across the broader Asia Pacific region, and elsewhere in the world,” Robertson said.
7 Comments
KERCHIIIIING!
When the old farts with a motherload of shares want to retire and there’s more on offer than the staff want to buy from them (given so many have been booted over the last 2 years not surprising) not really a lot of options for them to get the $ out.
This could be a great move.
Growth is important for any business.
Clems success means they are finding that harder by the day.
[Even harder after todays Virgin announcement].
This sale could provide an opportunity for them to grow their business through Asia.
They mightn’t be the majority shareholders any longer, but they might end up with a smaller share of a much bigger cake.
Good luck and well done I say.
when selling their company, wouldn’t it be great if somebody says….
“we thought this was a great idea because it’s a shit load of money and we don’t want to work as hard any more’
Well done 9:36 – your pockets have obviously been well lined by the deal.
9:36 here.
Sorry to disappoint you 3:34, but I don’t work at Clems, nor have I ever worked at Clems.
Here’s something else for you to ponder.
Note they have not allowed BBDO to go above 75%.
75% shareholding is generally accepted as the percentage at which a shareholder could impose their will on the remaining shareholders.
So,whilst Clems have sold down their equity, they’ve not actually sold out!
In fact, by retaining more than 25% they have managed to retain a fair amount of control.
I worked for them and they were shite