In increasing its stake from the current 30 per cent, FCB is exercising a provision in its contract with the affiliate's holding company Prakit Holdings, when FCB Worldwide was formed three years ago, said chairman Prakit Apisarnthanarax. "The option was actually supposed to have expired in May, but it was extended for another year. They have to exercise it by October 31, otherwise it will be cancelled," he said. Prakit Holdings is listed on the Stock Exchange of Thailand.
A majority stake will mean that the US company will be able to report the affiliate's earnings in its consolidated accounts. FCB Worldwide is anticipating a 50 per cent increase in earnings this year.
Since the stake increase will be at holding company level, FCB will effectively also gain a stake in Prakit Holdings' other advertising subsidiary, Publicis Thailand, Prakit said.
"We are talking to Publicis (to) buy themselves out, and they are interested," he said. Meanwhile, Prakit Holdings is planning to spin off its media buying business into a separate firm, Prakit Media House. "We do the buying already, but (only) for the broad company, Publicis and FCB."