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Real-Time news about Aegis Grp. (London Stock Exchange): 0 recent articles
|sharw: Large amount of info just been put up at:
Apologies for length but need to capture while live:
Ok - question on the right about Aegis
Aegis Group PLC (AGS:LSE): Last: 150.40, up 9.2 (+6.52%), High: 152.33, Low: 149.89, Volume: 8.35m
On the news it's looking to flog Synovate
The market research bit
Leaving it a tidier takeover target for Publicis
Or am I getting ahead of myself here?
that's the read across
this business goes
and the rest gets gobbled up
Been on the cards, I guess.
Aegis's CEO came from the other side of the business.
And it was always trickier to identify buyers for market research than ad sales.
As is, assuming this deal completes, it'd leave Aegis with a lot of cash and not much to do with it.
Can't really give it back to shareholders, as it's a growth company.
So - a big acquisition, I suppose.
Or a sale.
Anyone done any breakup valuations this morning?
here's something from Altium
Given that Synovate generates c. 36% of total revenue this would be a radical move for AGS, although it has long been recognised that there is little or no synergy between Synovate and the larger Aegis Media business. Synovate is also lower margin and although a high quality business with attractive medium term prospects is, in our view, the less well understood part of the group, a factor which we believe may have exerted a drag on its overall valuation. A price tag of £500m has been suggested in the press which we estimate would equate to c.0.9x / c.11x current year revenue / underlying operating profit respectively. Press comment suggests that other parties may also be interested with this morning's announcement likely to force their hand.
Whilst there can be no certainty that an agreement will be reached, we believe this morning's news will be taken well. Resultant cash would substantially enhance the group's ability to pursue its strategic goal of internationalising (particularly expanding into emerging markets). However, perhaps more significantly we believe this news will effectively place the group in play as a take out and / or break-up candidate with Groupe Bollore's c.26% stake a potential stepping stone in this process. We reiterate our Buy recommendation and believe the group's stock offers attractive value with or without the presence of bid speculation.
and here's Liberum
Aegis this morning confirmed it is in talks to sell its market research business,
Synovate, to global market research firm Ipsos (NR). We think other potential
bidders could emerge. The announcement of these talks, plus the questions it
raises over Aegis' future, are likely to mean the stock outperforms its agency
peers over the short-term, especially given the recent uncertain economic
newsflow. Reiterate Buy and 165p fair value
Do we think Synovate will be sold (depending, of course, on price)? Yes: Aegis'
CEO, Jerry Buhlmann, is a media man (he was CEO of Aegis Media prebecoming
CEO of Aegis Media) and the two businesses have always sat
awkwardly together as there are few synergies. A sale of Synovate has been
mooted by analysts and, while Aegis has always said Synovate is a core
business, there has always been the feeling that it would make sense to sell.
Could other bidders emerge? Yes: both Ipsos and its German-listed peer GFK
(NR) need to build up scale. GFK previously bid for TNS before it was bought by
WPP and has said it would look at Synovate if it came up for sale. Both should
have the financial capability to do a deal, especially given the favourability of the
GBP-EUR exchange rate.
Is the speculated £500m a good price? Yes: it equates to 11x 2010 EBITA preallocation
of central costs, which is a good price for a business that makes c. 8%
margins. WPP bought TNS back in 2008 for c. 14x 07 EBITA (including TNS'
central costs) but TNS had higher margins at 10.5% (in 07).
Would WPP bid for Synovate? Unlikely: not only are there potential market share
issues but we just do not see Synovate, with its heavy weighting towards custom
research, as a business that WPP feels as though it needs to buy, especially
given it is keen to emphasise its move away from big acquisitions. Strategically, a
deal would not make sense: the integration of TNS has not happened as quickly
as they planned so adding another integration effort on top would be a burden.
And with Market Research already at c. 25% of group revenues and already
acting as a drag on organic revenue growth and margins, we do not see any
reason why WPP would want to increase its exposure to the area.
What would Aegis do with the cash? There are several options: pay down debt;
hand the cash back; or make a big acquisition. They could pay down debt but
they only had £331m of net debt at YE10 and cash interest rates are low so there
would be the risk of dilution. We do not think they will return the cash to
shareholders as, essentially, it sends a signal they cannot find any good
investments and are a sitting target (though see below). Our thoughts are they
look to make a big acquisition, with the focus on digital, where the other major
groups have made major deals and where Aegis is likely to want to strengthen its
Good note, that one.
apologies that's long
but the best round up I have seen
That's Ian Whittaker
Who's also done a breakup price.
Assuming the £500m disposal price for Synovate is correct, we
estimate that a sale of the remaining part of Aegis (i.e. the media arm) at a mid-point multiple range would
equate to a share price range of 165p, in line with our DCF.
Putting a multiple valuation on the media business is somewhat tricky: there have been few (if any) sizeable
transactions in the space in recent years. However, given (a) media buying and planning is the one business
that benefits definitely from scale (b) it is also the highest margin part of an agency's business overall (at Aegis,
research makes 8% margins, media 18.6%, both pre-central costs) and (c) Aegis has a well-established
position in Western Europe, we see a multiple of 12-14x 2010 EBITA pre-central costs as credible, especially if
the lower margin research business goes for c. 11x EBITA, as speculated.
At these multiples for media and assuming a £500m valuation for the research business a mid-point of 13x
EBITA for the media business would mean Aegis would be worth 165p (including an adjustment for deferred
consideration). However, at a 15x multiple for the media business, Aegis could be worth up to c. 190p.
Anyway - that's enough of that.
done that one to death
|gerard j: On the contrary I think a partnership with the Bollore Group is in the pipeline and globally both companies will benefit from it.
As far as the share price is concerned, if we go through the 124p yr-high price, we could go to 140-150p rapidly, with the yr-end figures are due out in 2 weeks time.
Fasten your seat belt.|
|nigel_man: No I don't think so, Goldmans have recently started to cover the sector again with an 800p buy receommendation on WPP just gone out. (WPP fell likewise today to 708p) so could see a short-term recovery.
"WPP - Goldman Sachs has restarted coverage of the advertising and marketing conglomerate with a buy recommendation and 800p a share price target."
|le mass du pap: Did sweet fa for the share price......
Aegis Media appointed by Johnson & Johnson in Europe, Middle East, Africa
07/30/07 London, UK. Aegis Media announces that it has been selected by Johnson & Johnson as its media agency for Europe, the Middle East and Africa. The appointment follows a four month global media agency review.
The scope of Aegis Media's appointment covers communications planning, media planning and buying, both offline and online, in all Johnson & Johnson's markets in the region, with gross billings of $430m. The appointment will become effective from 2008. Johnson & Johnson's portfolio of brands is made up of world-class household names, including [Acuvue, Band Aid, Clean & Clear, Listerine, and Neutrogena].
Jerry Buhlmann, ceo, Aegis Media EMEA, said:"Johnson & Johnson is one of the world's great consumer brands companies, and we are extremely proud to be working with them across the whole region. Throughout the pitch process we found the cultural fit between our organisations extremely strong. We were also helped by the investment we've put into our network over the past five years - into our resources, our capability and our people right across media, digital, communications planning and insight. Altogether, that put us in a strong position to become Johnson & Johnson's partner. Now we are looking forward to building on those qualities in our work together."
For further information contact:
Aegis Group plc
+44 (0) 20 7070 7708|
|le mass du pap: Takeover speculation filtered through to the FTSE 250 stocks with media company Aegis and property group Quintain Estates both being cast into the limelight.
Hopes that Aegis is a potential target were stoked by UBS, which repeated its buy rating and 170p price target on the stock, saying the recent share price weakness offers a good buying opportunity and it could be worth as much as 235p in a bid situation.
It noted the shares have underperformed the media sector by around 12pc this year and the catalyst on the upside could be the sale of Group Bollore's 29pc stake in the company "which we think could happen sooner than the market expects".
The investment bank said Aegis is attractive to trade buyers, who could afford to pay up to 200p a share. "We think the other major ad agencies - WPP, Publicis and Havas - would be very interested in acquiring Aegis. While 200p represents a near-50pc premium to the current share price, we think management may be tempted by recent digital transactions to push for a higher sale price, especially as they are aware of the strategic importance of Aegis to both WPP and Publicis."
Aegis rose 5½ to 141½p
|le mass du pap: Marketing success
Marketing group Aegis rose 5.5p to 141.5p on news that it had won the European media buying account for US consumer group Johnson & Johnson. UBS issued a positive note on the business, saying: "We think the other major ad agencies - WPP, Publicis and Havas - would be very interested in acquiring Aegis. We estimate WPP and Publicis could afford to pay up to 200p, with even Havas affording this figure if it can tie up with a partner such as WPP. While 200p represents a near 50% premium to the current share price, we think management may be tempted by recent digital transactions to push for a higher sale price, especially as they are aware of the strategic importance of Aegis to both WPP and Publicis. A sum of the parts valuation for Aegis could be high as 235p or more."
|mr ashley james: Sounds like Publicis still interested at 140p
Publicis' Levy said rivals 'will not top my offer for Aegis'
LONDON (AFX) - Publicis SA chief executive Maurice Levy said a financial
buyer will struggle to trump the French advertising group's valuation of Aegis,
the media buying business that received a takeover approach from his company
earlier this year.
In an interview with the Guardian newspaper, Levy said a non-trade buyer
could not match the 140 pence-a-share price tag that Publicis attached to Aegis.
He was referring to discussions the British media buyer is holding with Hellman
& Friedman, the US private equity firm, which is expected to lead to a joint
approach with UK advertising group WPP.
"Normally a non-trade buyer will have an issue with getting synergies. To
extract synergies you need some similar assets," Levy said.
Publicis withdrew from takeover talks last month after deciding that it
could not go above 140 pence, a figure that valued the owner of Europe's largest
media buying network at 1.6 bln stg.
Levy said the Aegis shareholding held by Vincent Bollore, chairman of French
rival Havas, had contributed to his group's withdrawal from the auction.
"Vincent Bollore was going towards 20 pct and was making the acquisition
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|mozza0508: Mr James ..... Thanks for your input. I have stopped investing in shares since dot com years and now trades short term only whether up or down hence the interests in AGS.
My gut feeling is the share price will edge up steadily but still on the sideline at present.|
|mozza0508: Mr Ashley James......It 's apparent you are a AGS watcher and your contributions are much appreciated.
I am inclined to think that Sorrell of WPP will try to break up AGS if he could agree with Bollore. What's your views and how do you see share price movement in run up to 25 Nov deadline?|
|j tuwatmoya: good luck ash. but one thing to consider, when bollore comes out of the market what will happen to the share price? wpp possibly bluffing along with bollore, trying to entice publicis to overpay.
do you know what the rules are on share purchases now that he is over 20%? ive forgotten
also, havas share price performance hasnt been too wonderful|
Aegis Group share price data is direct from the London Stock Exchange