Word reaches me that Dentsu, Japan’s largest advertising network, has launched a pre-emptive $600m bid for digital independent AKQA.
No discourtesy to AKQA – which is well-respected – but that sounds an awful lot of money – even for an agency that is renowned for setting an impossible price on its independence. And it is: twice as much as it is worth gauged by conventional financial metrics. But then, Dentsu is desperate to buy digital presence in the West – and the USA in particular – at almost any price. And AKQA, which boasts an enviable blue-chip client list including McDonald’s, Coca-Cola, Unilever, Nike, Visa and Fiat, is one of a fast-shrinking number of desirable targets.
Readers of this blog will recall Dentsu’s bitter duel with its supposed ally Publicis Groupe to acquire Razorfish last year. Publicis eventually trumped Dentsu, which had offered an extraordinary $700m, with a lower bid of $530m; but then Publicis had an inside track with the owner, Microsoft, involving a favourable ad deal.
Dentsu eventually scored when its US unit acquired Innovation Interactive, the parent of digital ad shop 360i, at the beginning of the year. It also had its sights on search and social media specialist iCrossing, but that was snapped up at the beginning of the summer by the Hearst Corporation.
AKQA – founded in 1995 by Ajaz Ahmed, who remains its chairman – is a much bigger prize. Headquartered in San Francisco, it has outposts in London, New York, Washington DC, Shanghai, Berlin and Amsterdam; and employs over 800 people.
I’m told that Ahmed and chief executive Tom Bedecarré are against selling out to Dentsu. But the inconvenient truth is that their company has been majority-owned by private equity group General Atlantic for the past three years. GA calls the shots, and cannot ignore such a salivating offer…
I’ll keep you posted.
UPDATE, September 23rd: WPP bidding for AKQA, eh? Not at that price it won’t be. The rumour was described by sources close to WPP as “rubbish”. To prove the point, Campaign and Media Week – which gave credence to the story – have withdrawn it.
Posted by stuartsmithsblog 
