WPP Sweetens Ogilvy Bid by $75 Million

WPP Group PLC, making a big pitch to win Ogilvy Group Inc., today raised its buyout proposal for the reluctant advertising firm to $800 million from the previous $725 million.

WPP, the parent of J. Walter Thompson, sweetened its buyout proposal by $5 per share to $50. The previous bid worked out to $725 million.

Ogilvy, which has been critical of WPP’s takeover effort, said in a statement that it had been notified of the higher proposal and that it will “be considered by Ogilvy in a proper manner and in due course.”

Ogilvy’s stock rose $2.125 to $52 a share early today in heavy trading on the NASDAQ over-the-counter market.

A spokesman for WPP commented only vaguely today on the discussions with Ogilvy.

“It’s in the interests of both businesses that the proposal is brought to a swift conclusion,” the WPP spokesman said. “To that extent WPP would be prepared to raise its proposal.”

Sources said WPP, which bought the J. Walter Thompson agency in a hostile takeover in 1987, has held informal talks with representatives of Ogilvy about the possibility of raising its offer.

Ogilvy has publicly reacted strongly against any idea of a merger, and several of its largest clients have also expressed reservations about the prospect of a massive WPP-Ogilvy agency, which would be the largest agency after Saatchi and Saatchi PLC of Britain.

Speculation is widespread that Ogilvy has also been approached by several buyout groups with higher offers than the $45 per share initially proposed by WPP.

Named as possible suitors have been the buyout firms of Wesray Capital Corp. and Kohlberg Kravis Roberts & Co., as well as the ad agencies Interpublic Group Cos. and Omnicom Group Inc.

Last week, news of the original offer for a friendly merger sparked heavy trading and propelled Ogilvy’s stock price up to $49.875 at Friday’s close from $32 before the bid.

A merger of WPP and Ogilvy would create a group with annual revenues of more than $1.8 billion. WPP Group’s J. Walter Thompson agency has a client list that includes Citicorp, Kodak, Kraft General Foods, Nestle and Pepsico. Ogilvy Group’s Ogilvy & Mather has the accounts of American Express, Polaroid, Mattel, Beecham and Unilever.