Aegis enters talks to sell market research arm
Shares in Aegis jumped 7% after the marketing group confirmed it was in talks to sell its market research business Synovate to French firm Ipsos.
Speculation: Other firms could make rival bids for Synovate, or Aegis itself
The price tag is rumoured to be in the region of £500m, although Aegis did not mention a figure and stressed there was no certainty an agreement would be reached.
The stock was up 9.4p at 150.6p amid speculation that other companies might throw their hats into the ring to buy Synovate, or make a full-scale bid for Aegis itself.
Synovate, which has offices in 64 countries and employs 5,900 staff, has reportedly attracted interest from several buyers apart from Ipsos, which owns the Ipsos Mori polling company.
Other companies likely to be considering a bid include Gfk and Nielsen. Advertising firms Publicis and WPP both tried to buy Aegis outright in the past and could also show an interest.
Aegis and Ipsos have held preliminary talks in the past week and both sides have appointed advisers in preparation for formal negotiations, according to reports.
Some 26.5% of the shares in Aegis are owned by French billionaire Vincent Bollore, the chairman of communications group Havas.
Mr Bollore recently said he would keep an open mind about selling his stake, leading to speculation that a rival such as Publicis would make an offer as a prelude to a full takeover bid for Aegis.
Aegis is one of the world's leading marketing communications and market research groups. Aegis Media is made up of Carat, Vizeum, Posterscope, Isobar and digital marketing agency iProspect.
Aegis is reported to believe that Synovate, which is is run as a separate business to advertising and communications arm Aegis Media, has few synergies with the rest of the group.
View from the City
Aegis's confirmation of talks is likely to trigger speculation that if Synovate is sold, Mr Bollore will pursue the remaining Aegis Media business, according to Johnathan Barrett of broker Singer Capital Markets.
'While a disposal could be a surprise (this would effectively break the group up) it does highlight the continued level of mergers and acquisitions activity in the sector and the demand for non-advertising services,' he said.
'The market research sector has continued to consolidate and we would not be surprised if the announcement this morning triggers further interest in Synovate from other large agency groups and other research businesses such as GFK.'
Analyst Alex DeGroote of Panmure Gordon reiterated the broker's buy recommendation and raised its target price from 175p to 190p.
He said a potential Synovate transaction at around £500m was 'a positive catalyst'.
'This is materially ahead of our own valuation,' he added.
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