Newspaper article THE JOURNAL RECORD

Jwt Group Inc. Receives $430 Million Takeover Bid

Newspaper article THE JOURNAL RECORD

Jwt Group Inc. Receives $430 Million Takeover Bid

Article excerpt

Wednesday it is prepared to offer about $432 million to buy JWT Group Inc., one of the world's biggest advertising and communications companies.

JWT Group, which has been buffeted by losses and top-level management turmoil in recent months, said it planned to review ``all options'' to determine a course of action following the unsolicited offer of $45 a share.

News of the proposal sent JWT's stock price sharply higher on Wall Street. On the New York Stock Exchange, JWT stock jumped $9.75 a share to close at $49, an indication that some investors expect the bidding may go higher.

Securities analysts, however, called the $45-a-share figure reasonable.

The buyout proposal came from the London-based WPP Group PLC, a marketing services firm that is a fraction of the size of JWT. WPP said its revenues are running at an annual rate of approximately $130 million this year, compared with $649 million last year at JWT.

WPP's chief executive, Martin S. Sorrell, said in a letter to Don Johnston, chairman of JWT Group, that WPP Group was prepared to make a $45-a-share cash tender offer subject to JWT's board supporting the bid.

It said a WPP subsidiary already owns nearly 5 percent of the approximately 9.6 million shares JWT common stock outstanding.

``We are prepared to discuss and to negotiate all aspects of our proposal,'' Sorrell said in his letter to Johnston.

He asked that Johnston let him know by 4 p.m. Thursday about whether JWT Group was willing to enter into negotiations.

He said WPP had arranged for up to $530 million in financing for the deal.

Johnston was in England on business when the proposal was announced and was returning to the United States to review it, JWT spokesman Don Deaton said.

In a statement, JWT Group said it would ``review with its financial and legal advisers all options, including the WPP Group proposal, to determine what course of action would be in the best interests of JWT Group's shareholders, clients and employees.''

Charles Crane, who follows the advertising industry for the investment firm Prudential Bache Securities, said WPP's $45-a-share offer approximated his valuation of the company.

Fred Anschel, at Dean Witter Reynolds Inc., said the size of the offer means ``it may not be easy'' for JWT to avoid a takeover by making its own offer for its stock.

Sorrell's financial ability and knowledge of the advertising business are well-respected. He was finance director for another British advertising concern, Saatchi & Saatchi, which has grown to become the world's biggest advertising holding company. …

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