Although WPP Group was considered the underdog in its battle with Microsoft to purchase digital ad agency 24/7 Real Media, the British ad holding company won out as the interactive shop agreed to its buyout offer of $649 million. As part of the deal, which received the unanimous approval of both companies’ boards, WPP will pay the 24/7’s shareholders $11.75 for each share, a price that represents a premium of 30 percent over the average closing price of 24/7’s shares for the last 60 trading days. Pending regulatory and shareholder approvals, the purchase is expected to be completed in the third quarter of 2007. Release
WPP’s purchase of 24/7 marks the latest in a flurry of deals from large ad holding companies looking to quickly bolster their digital marketing capabilities. Over the past six months, rivals like French ad holding company Publicis Groupe bought Digitas for $1.3 billion and reorganized its global interactive ad units around it earlier this month. This past week saw WPP creative agency Young & Rubicam shift employees to its new in-house digital group.
Doubts were cast on WPP getting 24/7 following reports that WPP chief executive Martin Sorrell “blanched” at the company’s $600 million asking price, while Microsoft, after having lost DoubleClick to Google, would be more than willing to shell out even more. More after the jump.
Update: NYT: The purchase is seen as an attempt to maintain a certain equilibrium to the online ad market in light of Google/DoubleClick, as Sorrell told participants in a conference call discussing the deal.