Top Story


Home >> International >> Article

International: WPP and Grey adjust acquisition deadline details

Font Size   16
International: WPP and Grey adjust acquisition deadline details

WPP Group and Grey Global Group this week pushed back the date when either side can call off the engagement if marriage plans run into trouble.

U.K.-based WPP, the No. 2 advertising holding company, agreed Sept. 11 to buy New York-based Grey, the industry's No. 7 firm, in a deal initially valued at $1.52 billion in cash and WPP stock. Under that pact, either side could cancel the deal if it doesn't close by nine months later -- June 11, 2005.

Revised terms

Under revised terms signed by the companies and filed with the Securities and Exchange Commission Dec. 1, either side can walk away if the deal doesn't close after 11 months -- Aug. 11.

WPP had no comment today and Grey wasn't available for comment late Dec. 1. But the slight change could be tied to an antitrust review. The change in terms came a week after the deal ran into an unexpected obstacle when the European Commission, Europe's antitrust regulator, asked for more information from WPP.

Grey had expected to wrap the sale in January, but the European Commission's move could delay the closing. European regulators conceivably could reject the deal if they saw insurmountable antitrust issues, though that seems unlikely. U.S. regulators already have approved the merger.

$56 million termination fee

Under terms of the merger, Grey can cancel the deal before next August by paying WPP a termination fee of $56 million. The contract allows WPP to cancel the merger before August if Grey's board "withdraws, modifies or adversely changes" its recommendation that Grey shareholders vote for the deal; or if Grey's board recommends shareholders vote for an acquisition proposal from someone else.

The stock market is betting the deal will happen. WPP's share price has risen since the deal was signed in September, so Grey shareholders are set to get cash and WPP stock worth $1,117 a Grey share based on WPP's Dec. 1 price, or $1.69 billion. That's up from $1,005 a Grey share or $1.52 billion when WPP announced the acquisition in September. Grey stock hit a record price Dec. 1, closing up $12.98 at $1,110 a share.

Source: Adage


Siddharth Kumar Tewary, Founder, Chief Creative, One Life Studios and Swastik Productions, on owning the IP on his most ambitious project 'Porus,' the risk of recovering its cost and his distribution strategy

Webscale plans to build the brand around smooth operations for the e-commerce sector and then move on to demand generation

Shriya Ghate, Business Head, Tinkle, spills the beans on the company's vision for its special line of merchandise launched to celebrate its 37th anniversary, its pricing, marketing strategies, and more

Vivek Patni, Director of Wonder Cement, on the current marketing strategies and challenges that brand owners face

Videocon D2H and Hindustan Lever continue to dominate BARC's Top 10 Brands and Top 10 Advertisers for week 45

The series will be telecast on SONY TEN 1 channels with English commentary and on SONY TEN 3 channels with Hindi commentary

The new TVC, which is created by Dharma 2.0, is a step towards keeping cities and surroundings clean