Young & Rubicam Expands Deal Talks

Advertising powerhouse Young & Rubicam Inc., which has been in takeover talks with British rival WPP Group for several months, is also holding discussions with Publicis of Paris, sources familiar with the situation said. The New York-based company, the world’s seventh-largest ad organization in terms of income, approached Publicis because it has been unable to reach an agreement with WPP, the sources said. Although talks with WPP are continuing, the negotiations are stuck on the issue of price, the sources said. Other issues related to a deal have essentially been resolved, they said. WPP has made an all-stock offer, widely reported at about $65 a share, that has been deemed inadequate by Y&R.; A Y&R; spokesman declined to comment. Meanwhile, the exact status of a potential offer from Publicis could not be determined. WPP already owns two of the most venerable names on Madison Avenue--J. Walter Thompson and Ogilvy & Mather Worldwide. Y&R; shares fell $2.13 to close at $49.88 on the NYSE, while WPP’s American depositary receipts rose $3.88 to close at $79.63 on Nasdaq.