• by Joe Mandese  @mp_joemandese, September 26, 2005

Acting more like a day trader interested in short-term profits than a suitor pursuing a long-term asset, Paris-based agency holding company Publicis Groupe late last week completed a series of trades that have netted it a small stake in London-based Aegis Group. The net position--more than 7 million shares of Aegis stock--give Publicis about a 0.6 percent stake in Aegis, a company it has publicly acknowledged to be interested in acquiring. The transaction, which was too small to require Publicis to announce it publicly, was disclosed by Aegis as part of its regular updates to investors.

While some Publicis insiders were speculating late last week on the meaning of the investment, on the surface it appears to be more of a hedge--a speculative stock bet--than a wedge to acquire a bigger stake, raising questions about what Publicis CEO Maurice Levy knows about the future of Aegis, and who else might be interested in acquiring the media services and marketing research firm.

Two candidates that are not interested, according to a series of reports over the weekend, are the world's largest and second-largest agency holding companies: Omnicom and WPP Group.

Omnicom Friday stated that it would not bid on Aegis, the parent of Carat, Vizeum, Isobar, Posterscope, and various marketing research companies--and would instead focus on growing its existing media services organically, according to a report in the Financial Times. WPP Group also feigned disinterest. Speaking after the Marketing Society in Scotland's annual dinner on Thursday, WPP CEO Martin Sorrell said: "We are observing everything. There's nothing to get excited about," according to a report in the Scotsman.

With the two biggies indicating they will sit this bidding war out, and with a third--financially beleaguered Interpublic Group--not even in the equation, the focus is on the French: Publicis, the parent of Starcom MediaVest Group, and Zenith Optimedia Group; and Havas, the parent of MPG.

The big question is whether the French ad shops are genuinely interested in acquiring Aegis--which was formed on the basis of a formerly French media buying agency, Carat Espace--or whether they are simply trying to make some profits on what was generally regarded to be an undervalued stock, which now appears to be in play because of moves by potential French suitors.

In fact, French corporate raider Vincent Bollore, who early this year seized control of Havas, has already made hundreds of millions since acquiring a 6 percent stake in Aegis last month.

Presumably sensing that there is even more upside to Aegis stock, Publicis last week made a series of trades--acquiring 8,385,499 shares and then selling 1,141,329, according to one filing, and then buying 8,294 shares and selling 30,792, according to another. At press time, that left Publicis with a net position of 7,221,672 shares of Aegis stock, or about 0.6 percent of Aegis' ordinary shares.

That's too small a stake to be considered a strategic play, or a first step toward accumulating enough for a takeover, but it would a tidy investment if you had a good sense that the stock would run up even further.

The big question: With Omnicom and WPP Group sitting it out, who would step in to run up Aegis stock? The answer to that may not be an advertising services company. But it may be companies operating in a related field: marketing research.

While Madison Avenue focuses on Aegis media planning and buying services, Aegis has also accumulated some prized marketing research businesses, especially red-hot U.S. marketing mix modeling firm MMA and consumer research firm Copernicus, which operate under Aegis' Synovate division.

At least two major international market research companies are now rumored to be eyeing Aegis: French firm Ipsos, which lost out to German researcher GFK during last year's bidding war to acquire NOP Research from Interpublic; and Taylor Nelson Sofres, the parent of TNS Media Intelligence (formerly CMR), which has been eager to gain a stronger foothold in the U.S. marketplace.

Interestingly, VNU, the parent of Nielsen Media Research and ACNielsen, has not been rumored, although it would also seem to have some strategic interests in Aegis. That may be because VNU is still trying to complete a massive acquisition of IMS Health. But there is another interesting connection between VNU and Aegis. While VNU would likely be interested in Aegis' research assets, VNU also is in a joint venture with WPP Group. Could VNU and WPP jointly bid for Aegis and divvy up the assets?