Grey Global Agrees to Merge into WPP in $1.5 billion Cash and Stock Bid
September 13 2004 - 3:15AM
PR Newswire (US)
Grey Global Agrees to Merge into WPP in $1.5 billion Cash and Stock
Bid NEW YORK, Sept. 13 /PRNewswire-FirstCall/ -- Grey Global Group
Inc. (NASDAQ:GREY) announced today that it agreed to merge into a
wholly-owned subsidiary of WPP Group plc in a cash and stock
transaction valued, as of the close of business on September 10,
2004, at approximately $1.5 billion. Under the terms of the merger
agreement, Grey shareholders have the right to elect either $1,005
in cash or 21.746 American Depository Shares of WPP (valued at
$1,005, based on the closing price of the WPP American Depository
Shares on September 10, 2004). Shareholder elections are subject to
proration that is designed to ensure that 50% of Grey shares will
be exchanged for cash and 50% of Grey shares will be exchanged for
American Depository Shares of WPP. The American Depository Shares,
which trade on the New York Stock Exchange, represent five ordinary
shares of WPP, which shares are traded on the London Stock
Exchange. The company will operate as an independent network within
the WPP group of companies under the Grey name. In connection with
the transaction WPP sought and obtained a new employment agreement
from Edward Meyer under which he has agreed to continue as Chairman
and CEO of Grey Global Group until at least December 31, 2006.
WPP's and Mr. Meyer's expectation is that Mr. Meyer will join the
Board of Directors of WPP after a transition period following the
closing of the merger. In order for the merger to be completed, the
merger agreement must be approved by a vote of at least two-thirds
of the voting power of all Grey stockholders (with holders of
Grey's Class B common shares entitled to ten votes per Class B
share) and by a vote of at least two-thirds of the total number of
Grey outstanding common shares (with holders of Class B common
shares having one vote per Class B share). Mr. Meyer has agreed to
vote all of his Grey common and Class B shares in favor of the
merger, representing approximately 43.5% of the voting power
(giving effect to the special voting power of the Class B shares)
and approximately 20.5% of the voting power on a per share basis
(without giving effect to the special voting power of the Class B
shares). The merger is also subject to other customary closing
conditions, including regulatory approval, and is expected to be
completed around year- end. The merger does not require WPP
shareholder approval. "We are pleased to join WPP, one of the
world's leading advertising and communications firms and a company
we have long respected, because of our shared values and strong
commitment to superior client service," Mr. Meyer said. "Grey's
greatest asset is its people, and while the ownership structure
will change, our day-to-day business relationship with our clients
will remain unchanged and our commitment to do great work will
continue to be our passion. By agreeing to combine with WPP, our
clients will be able to access a broader array of global services
and tools, and our employees can expand their careers in exciting
directions." Mr. Meyer continued: "I have spent my entire working
career, nearly 50 years, at Grey helping companies build many of
the world's greatest brands. I am equally proud of the work I have
done to build the Grey brand. I am personally committed to a very
smooth integration and to Grey's continuing success." Commenting on
the announcement, Sir Martin Sorrell, Group Chief Executive of WPP
said, " The addition of Grey Global Group to WPP will bring a
number of benefits to our clients, our people and our shareowners.
In addition to broadening our relationship with a number of our
leading clients, Grey will bring access to new clients, strengthen
our activities in advertising, media investment management, public
relations, healthcare and direct and interactive. Additionally,
Grey's broad geographic spread will further strengthen WPP's market
position. We believe that WPP will offer Grey's clients and its
people significant enhanced opportunities. All of us at WPP are
excited by the prospect." About Grey: Grey Global Group ranks among
the largest global communications companies in the world. Grey
Global Group operates branded independent business units in many
communications disciplines including general advertising, public
relations/public affairs, direct marketing, internet
communications, healthcare marketing, brand strategy and design,
and on-line and off-line media services. Goldman, Sachs & Co.
and J.P. Morgan are acting as financial advisors to Grey Global
Group Inc. in connection with the transaction. Simpson Thacher
& Bartlett LLP is acting as legal counsel to Grey Global Group
Inc. in connection with the transaction, and Davis Polk &
Wardwell is acting as legal counsel to Edward H. Meyer in
connection with the transaction. Forward-Looking Statements The
statements, analyses, and other information contained herein
relating to the proposed merger and anticipated synergies, savings
and financial and operating performance, including estimates for
growth, trends in each of the operations and financial results, the
markets for products, the future development of business, and the
contingencies and uncertainties of WPP Group plc ("WPP") and Grey
Global Group Inc. ("Grey") to which WPP and Grey may be subject, as
well as other statements including words such as "anticipate,"
"believe," "plan," "estimate," "expect," "intend," "will,"
"should," "may," and other similar expressions, are
"forward-looking statements" under the Private Securities
Litigation Reform Act of 1995. Such statements are made based upon
management's current expectations and beliefs concerning future
events and their potential effects on the company. Future events
and their effects on WPP and Grey may not be those anticipated by
management. Actual results may differ materially from the results
anticipated in these forward-looking statements. For a discussion
of factors that could cause or contribute to such material
differences, investors are directed to the risks and uncertainties
discussed in WPP's most recent Annual Report on Form 20-F for the
year ended December 31, 2003, Grey's most recent Annual Report on
Form 10-K and 10K/A for the year ended December 31, 2003 and Grey's
quarterly reports on Form 10-Q and other documents filed by WPP and
Grey with the Securities and Exchange Commission ("SEC"). These
risks and uncertainties include, without limitation, the following:
the ability to promptly and effectively integrate the businesses of
Grey and WPP; the reaction of WPP's and Grey's clients to the
transaction and the ability to retain those clients; the ability to
retain key personnel; potential client conflicts; the ability to
achieve the anticipated strategic benefits of the proposed merger;
the diversion of management time on merger-related issues; the
effect of foreign exchange rate fluctuations; the performance of
financial markets and interest rates; competitive and business
factors; new tax or other government regulation; and changes in
general economic conditions. Neither WPP nor Grey undertakes, and
each specifically disclaims, any obligation to update or revise any
forward-looking information, whether as a result of new
information, future developments or otherwise. Important Legal
Information This communication is being made in respect of the
proposed merger involving WPP Group plc and Grey Global Inc. In
connection with the proposed merger, WPP and Grey will prepare a
registration statement on Form F-4 containing a proxy
statement/prospectus for the stockholders of Grey to be filed with
the SEC, and each will be filing other documents regarding the
proposed transaction, with the SEC. Before making any voting or
investment decision, Grey's stockholders and investors are urged to
read the proxy statement/prospectus regarding the merger and any
other relevant documents carefully in their entirety when they
become available because they will contain important information
about the proposed transaction. The registration statement
containing the proxy statement/prospectus and other documents will
be available free of charge at the SEC's Web site,
http://www.sec.gov/. Stockholders and investors in Grey or WPP will
also be able to obtain the proxy statement/prospectus and other
documents free of charge by directing their requests to Grey, 777
Third Avenue, New York, NY 10017 (212-546-2000) or to WPP, 125 Park
Avenue, New York, NY 10017 (212-632-2200). Grey and its directors
and executive officers may be deemed to participate in the
solicitation of proxies in respect of the proposed transactions.
Information regarding Grey's directors and executive officers is
available in Grey's Amendment to their Annual Report for the year
ended December 31, 2003, which was filed with the SEC on April 29,
2004. Additional information regarding the interests of such
potential participants will be included in the proxy
statement/prospectus and the other relevant documents filed with
the SEC when they become available. DATASOURCE: Grey Global Group
Inc. CONTACT: Jan Sneed of Grey Global Group, +1-212-546-2422, or
Cell, +1-917-543-4125 Web site: http://www.grey.com/
Copyright
Grey Global (NASDAQ:GREY)
Historical Stock Chart
From Nov 2024 to Dec 2024
Grey Global (NASDAQ:GREY)
Historical Stock Chart
From Dec 2023 to Dec 2024