The addition of Sapient will significantly boost Publicis' digital ad sales. But other bidders may emerge for Sapient, says one analyst. Fred Katayama reports.
Just five months after its failed merger with Omnicom, French ad giant Publicis is back at the altar with another American, digital ad specialist Sapient. Publicis, whose clients include the likes of Coca-Cola, is dishing out a huge dowry: $3.7 billion in cash, a hefty 44 percent premium. The deal enables Publicis to hit its goal of getting half of sales from digital four years early. Sapient is one of the last remaining big independent digital agencies. SunTrust Robinson Humphrey analyst Frank Atkins says the deal is likely to go through smoothly because it appears to be a friendly one, but adds, "It is possible that others will make bids as well." Potential home wreckers he names: WPP, Omnicom, Interpublic and Accenture. Sapient's stock sprung sharply higher at the open. Publicis' stock fell, for many shareholders expecting a buyback see that being pushed off. Some analysts were critical of Publicis CEO Maurice Levy's move, saying he is overpaying for a company whose growth may have peaked.