• by Joe Mandese , September 1, 2005

Don't look for a cash-strapped Martin Sorrell to jump into what appears to be a creeping bidding process to acquire fellow U.K.-based agency holding company Aegis Group. But Sorrell's WPP Group has acquired an Australia-based holding company that ironically places a unit of Zenith Media under the control of Sorrell's media czar, Group M chief Irwin Gotlieb. On Thursday, WPP confirmed that it has acquired Australia's Communications Group Holdings, which operates the Zenith brand Down Under.

While terms of the deal were not disclosed, the acquisition of a 70 percent stake in CGH that WPP did not already own is believed to be just enough of a stretch to preclude a cash-strapped and debt-ridden WPP from making any other major acquisitions, at least in the near future.

That throws an interesting new dynamic into the stake French corporate raider Vincent Bollore recently took in Aegis Group, a plumb communications services asset that many believed had been trading at below market value. Bollore now controls more than 6 percent of Aegis, the parent of the Carat, Vizeum, Isobar, and Posterscope media networks, as well as juicy research assets.

There have been two theories circling around Bollore's stake, which was reminiscent of his first strike a year earlier, which ultimately led to his takeover of French agency holding company Havas. One was that Bollore simply is a shrewd investor, and that he was looking to turn a quick profit. By making a large initial investment in Aegis, that scenario suggested other suitors would step forward, driving up the value of Bollore's stake. WPP, in principle, seemed like the most likely suitor. Carat, which handles Procter & Gamble, Pfizer, and other major clients, would have put Sorrell's Group M firmly in the dominant global media buying position. Aegis research assets, which include ultra-hot marketing mix modeling shop MMA, would have been a sweet addition to WPP's Kantar Media Research division.

Following the CGH acquisition, it now seems unlikely that Sorrell is in a position to take on another big deal. That narrows the playing field of Aegis suitors down considerably. At least one major Japanese-based agency group was believed to have been eyeing Aegis before Bollore's move, but may have been scared off by the bidding prospect. Publicis Group likely does not see Aegis as a strategic play. Among other things, it would ironically conflict with its P&G business, because P&G does not like to consolidate all of its advertising services into a single entity. Both Publicis' Starcom MediaVest Group and Aegis' Carat share P&G's communications planning account.

Interpublic Group is in no position to take on a major deal, although it would likely benefit from the addition of Aegis. Omnicom is known as a financially prudent investor, and is not believed to be sniffing around Aegis.

That leaves only one logical suitor for Aegis: Havas' Bollore, who may have timed his bid precisely because he knew WPP's Sorrell would be in no position to counter. Sorrell carries the title of a British knight, but right now Bollore may very well be saying, "check, mate."