Activist Investor Elliott Associates Discloses 6.7% Stake In IPG

Activist investment company Elliott Associates disclosed an ownership stake in the Interpublic Group of 6.7% in a filing with the U.S. Securities and Exchange Commission Thursday morning.  

Rumors about Elliott buying up IPG shares circulated in late May, sending IPG’s stock price above $19.50 -- its highest price in years. The investor was not commenting at the time.

In midday trading today, IPG shares were up 23 cents to $20.08.

In the filing, Elliott said that it had purchased the holding company’s stock in the “belief that such securities are undervalued and represent an attractive investment opportunity.” Elliott said it may make proposals regarding potential changes in the ownership, management, strategy and other aspects of the company “as a means of enhancing shareholder value.”

Elliott, which is led by investor Paul Singer, said it intended to have a “constructive dialog with” IPG management and board members “regarding steps to maximize shareholder value.”

In addition to meeting with present managers and shareholders, the investment company also indicated that it might meet with “third parties, including potential acquirers, service providers and financing sources, and/or formulate plans or proposals” regarding IPG.

IPG has long been considered a potential acquisition target for further consolidation within the ad industry. Speculation about further consolidation has increased in the aftermath of the failed Publicis-Omnicom Group merger.

In his note on the cancellation of the POG merger in early May, Pivotal Research analyst Brian Wieser posited that IPG remains a “likely seller.”

“The question is not whether or not there will be bids,” for IPG, Wieser wrote, “but at what price IPG would sell, especially considering it should have a strong year on an operating basis.”

Last week the company reported strong second-quarter results, including organic revenue growth of 4.7% and a 20% hike in net profits. On a call with analysts and investors, IPG CEO Michael Roth said the company’s financial position, is “the best it’s been in years.”

IPG issued this statement after the closing bell on Thursday: “We have strong, positive relations with the investment community. As such, we meet with shareholders regularly and are open to engaging in dialogue with Elliott Management to assess their perspectives. Above all, we remain focused on adding value to our clients and further enhancing shareholder value.”

This story has been updated to include a statement from IPG.




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