Breaking: Mitchells sale confirmed
The Mitchell/Aegis rumour unleashed earlier has been confirmed. The press release issued by the group is provided unedited below:
Mitchell Communication Group today announced plans to merge with Aegis Group Plc, one of the world’s fastest growing marketing communications networks.
Under the proposed merger, Aegis will acquire all of the issued capital in Mitchell Communication Group via a scheme of arrangement for approximately A$363 million. In addition, in the event the transaction is approved, Mitchell shareholders will receive the benefit of a fully franked Mitchell dividend in respect of the year ended 30 June 2010 of A$0.05 per share.
Harold Mitchell, founder and Executive Chairman of Mitchell Communication Group, said:
“I am delighted that we have reached agreement with Aegis over a deal which offers enormous opportunity for our staff and clients and tremendous value for our shareholders.”
“Aegis is the best placed of the global agency groups for the convergent future, with a strong focus on digital and media. We are convinced they have enormous growth ahead of them and having Mitchell as part of their global network will be an important part of achieving that.”
“Our two organisations have a strong cultural fit and share much strength across traditional, digital and diversified marketing. Our 35-plus years of local expertise will be bolstered by the tools, resources and experience of Aegis’ global network, giving our merged businesses a powerful position in Asia Pacific.”
Harold Mitchell intends to take his consideration in Aegis shares if the merger is approved which will make him a significant shareholder in the global network. Mr Mitchell intends to remain Executive Chairman of the combined entity in Australia and New Zealand operations of the two businesses should the merger be successful. There are not expected to be any immediate staff or brand changes at Mitchell Communication Group or within Aegis’ local operations.
Aegis operates in 82 countries and employs more than 15,000 people worldwide. It operates through two separate divisions – media communications with Aegis Media and market research with Synovate.
The merger will take Aegis Group to a stronger position in both traditional and digital media in Australia and will considerably strengthen the group’s presence in the Asian market. Aegis counts the world’s biggest brands amongst its clients, including Nokia, Kellogg’s, Disney, Coca-Cola, Johnson & Johnson, P&G and Unilever.
There are five major brands under Aegis Media: Carat (the world’s leading independent media communications specialist); Isobar (a pioneering global agency network); Posterscope (the world’s first real out-of-home specialist); Vizeum (a challenger media brand) and i-prospect (a global leader in high performance search and digital communications). All except Posterscope and i-prospect currently operate in Australia and New Zealand.
Synovate is a global market research company with representation in approximately 60 countries with custom research as its core business. Aegis Group is listed on the London Stock Exchange.
Mr. Mitchell has also reached an agreement with Aegis under which Aegis has an option over 19.9% of his direct shareholding and related interests in Mitchell. Jerry Buhlmann, Aegis Group Chief Executive Officer, said:
“Mitchell is the leading marketing communications group in Australia, the eighth largest ad spend market in the world, and this acquisition is a further step in transforming Aegis’s operations in the Asia-Pacific region. Our businesses are a strong strategic and cultural fit. Combining Mitchell with our existing business in Australia will create a formidable business with a compelling offering for the benefit of all our clients and position us for continued
strong growth in the most dynamic region in the world.”
The shareholder meeting to approve the Scheme is expected to be held in late October 2010.