American Express Said to Be Interested in Ogilvy

Membership has its privileges, but maybe ownership has more. Even as the British marketing firm WPP Group raised its offer for Ogilvy Group to about $800 million Monday, word also surfaced on Wall Street that long-time client American Express may have talked with Ogilvy officials about buying the ad firm.

Officials from Ogilvy and American Express refused to comment on that Monday. Ogilvy closed at $52 a share in over-the-counter trading Monday, up $2.125 from Friday’s close. The new WPP offer, at $50 per share, was up from the previous $45 per share the company offered slightly more than one week ago.

Ogilvy officials were not willing to comment on speculation from Wall Street analysts that American Express had shown interest in purchasing its ad agency of 17 years. “We’ve had a lot of expressions of interest,” said Joele Frank, an Ogilvy spokeswoman. “I cannot comment on any of them.”

American Express executives also were mum. “We cannot comment on speculation,” said Lawrence A. Armour, senior vice president of corporate communications at American Express. The New York-based company’s chairman, James D. Robinson, was in Hong Kong on Monday, meeting with officials from the Travel Related Services division of American Express. He also was unavailable for comment.

American Express is linked to Ogilvy in more ways than its advertising. The New York investment firm, Shearson Lehman Hutton, is 62% owned by American Express. And Shearson has been acting as one of Ogilvy’s principal Wall Street advisers since WPP made its initial offer for Ogilvy.

Wall Street analysts say it would be an extremely unusual setup for a client to own its advertising agency. But one top advertising analyst, who asked not to be named, said: “There’s no reason why something like this can’t work. Everyone knows Ogilvy wants to be bought by anyone but WPP.” In fact, said the analyst, “In Europe, situations where clients own their agencies are increasingly common.”

American Express is Ogilvy’s largest client, and has been with the firm since 1962.

Last year, American Express posted net income of $773 million on revenue of about $7.4 billion.

Meanwhile, a WPP spokesman also declined to comment on the possibility of competing against American Express for Ogilvy. But a statement from WPP said that its new offer was made “to avoid unnecessary and potentially unsettling delay in the negotiation of a friendly transaction.”