Singleton group dubs merger, float plan disastrous

<p>A plan to form a diversified communications company from a number </p><p>of small to mid-sized Australian agencies and publicly float it on the </p><p>stock exchange has been met with fierce criticism from Australia's only </p><p>successful, publicly-owned advertising agency, John Singleton </p><p>Advertising. </p><p><BR><BR> </p><p>The venture, which is believed to be the brainchild of former adman </p><p>Michael Ball (founder of The Ball Partnership), would see a number of </p><p>Australia's smaller agencies and other marketing services companies </p><p>amalgamated to form one super agency, which would then be publicly </p><p>floated. </p><p><BR><BR> </p><p>The project for the diversified agency would be an attempt to create </p><p>only the second publicly-owned advertising agency, after John Singleton </p><p>Advertising (which in 1998 became Singleton Ogilvy & Mather) was floated </p><p>in the early '90s. </p><p><BR><BR> </p><p>The initiative would likely see the agencies bought out by Mr Ball, who </p><p>would then create a holding company for the agency, with executives </p><p>likely to retain management responsibilities for their own agency. </p><p><BR><BR> </p><p>Agencies mentioned in relation to the venture include Belgiovane </p><p>Williams Mackay, Collins Thomas Cullen and The Edge in Melbourne. </p><p><BR><BR> </p><p>But Singleton Ogilvy & Mather CEO Russell Tate has warned the attempt </p><p>could be a dismal failure because it attempts to bring together not only </p><p>a diverse group of companies, but also diverse personalities. </p><p><BR><BR> </p><p>Mr Tate said whether or not an agency could be floated was not the </p><p>issue, as the Singleton example had proven it was possible to make it </p><p>succeed, but attempting to make a group of people who "are, or at least </p><p>should be enemies" work together as a merged agency and then to float it </p><p>on the stock exchange would be disastrous. </p><p><BR><BR> </p><p>"I certainly wouldn't be putting money into it," said Mr Tate. </p><p><BR><BR> </p><p>"If you get all these agencies trying to work for the common good and </p><p>then try to decide who gets what shares, it would be a bloodbath. </p><p><BR><BR> </p><p>"Unless there is something missing (in the details of the plan) I find </p><p>it an extraordinary thing." </p><p><BR><BR> </p><p>Mr Tate said when John Singleton Advertising was floated in 1994 it was </p><p>done so along with Singleton's share of the 10 Network. </p><p><BR><BR> </p><p>"I'm not sure we would have been so successful if we were just offering </p><p>shares in an advertising agency," he said. </p><p><BR><BR> </p><p>He said while it was easier to float an advertising agency in today's </p><p>climate, it was important to prove to investors that there was </p><p>consistency in the business. </p><p><BR><BR> </p><p>The loss of a big account, when the agency is in the public eye is a lot </p><p>more damaging, than if the agency is owned by its principals. </p><p><BR><BR> </p><p>With a number of different smaller agencies being brought together under </p><p>one roof, would-be investors would be likely to take an interest in the </p><p>histories of all members of the new agency. </p><p><BR><BR> </p><p>But Mr Tate said a public float could be very beneficial to an agency as </p><p>far as improving efficiency and making the business more </p><p>accountable. </p><p><BR><BR> </p><p>"You are accountable to other shareholders than just the guy down the </p><p>hall and that makes you very efficient," Tate said. </p><p><BR><BR> </p>