True North delays earnings announcement
Takeover target True North Communications has delayed the announcement of its full-year earnings and has cited an accounting error as the reason behind the delay.
LONDON (Brand Republic) - Takeover target True North Communications has delayed the announcement of its full-year earnings and has cited an accounting error as the reason behind the delay.
True North said its financial advisers had brought an accounting matter to the attention of the Securities and Exchange Commission in New York, and is discussing the matter.
True North was rocked last November when its FCB Worldwide agency lost its biggest client, car manufacturer DaimlerChrysler, to rival Omnicom Group’s BBDO Worldwide.
At the time, David Bell, True North chairman and CEO, gave a strong hint that company could be up for sale, saying it was “open to strategic opportunities”. It has since been linked to possible bids by France’s Havas Advertising and the UK’s Cordiant Communications.
The loss of DaimlerChrysler was a serious blow to the company. The Chrysler account represented $140m (£96.7m) in annual billings or 9% of its total billings.
In addition to the accounting delay, True North said a delay in an earnings release by interactive agency Modem Media, in which True North holds a 46% stake, had also contributed to the wait.
In a statement, Kevin Smith, True North’s executive vice-president and chief financial officer, said, “It is important to recognise that these are technical accounting matters which would not affect either our cash flow or, we believe, the underlying economic value of our business, but could affect how we report our results.”
True North owns FCB Worldwide and the Bozell Group; public relations agency BSMG Worldwide; and direct marketing shop Marketing Drive Worldwide.
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