Speculation About ‘White Knights’ : Rumors Fuel Heavy Trading of Ogilvy

Amid rumors of possible “white knights” rescuing the Ogilvy Group from its unwanted British suitor, WPP Group, Ogilvy’s stock was the most heavily traded over the counter Tuesday.

Ogilvy closed up 62.5 cents at $49.75 a share, with more than 3 million shares trading hands.

Some executives and analysts speculated that Ogilvy might escape WPP by merging with another American advertising holding company--such as the giant Omnicom Group or the Interpublic Group of Companies. Said one top New York ad executive who asked not to be named: “Give it time. Other bidders will soon show their faces.”

But officials from Ogilvy were outwardly noncommittal on the topic. “When there are no names for certain, people make up names,” said Jonathan Rinehart, chairman of Adams & Rinehart, Ogilvy’s public relations division. “The board of directors will give its response to all this when it meets on May 16th.”

Executives from both Omnicom and Interpublic declined to comment.

One analyst, however, said other advertising companies in addition to Ogilvy could soon become takeover targets, too. “It is far more difficult to establish a global service business than anyone thought,” said Margaret Stahl, analyst at the New York office of the investment firm, Wood Gundy Ltd. “Unlike most foreign advertising agencies, American agencies are the largest in the world and have a global presence. This makes them very valuable.”

But while some analysts believe that the price for Ogilvy stock will eventually rise to at least $55 a share, others think WPP has already offered too much. “From the standpoint of WPP stockholders, where does all of this stop?” asked James D. Dougherty, analyst at the New York investment firm, County NatWest USA. “The question is, how much is too much to pay for an advertising agency?”