Omnicom set to buy back digital agencies
NEW YORK - Omnicom looks set to buy back full control of digital agencies Organic and Agency.com, which it spun off two years ago in a controversial deal that led to resignations and its accounting practices being attacked.
Omnicom is understood to have already bought back full ownership of Organic, with a move to acquire full control of Agency.com expected shortly.
Omnicom, the world's third-largest advertising network, spun off its digital advertising agencies into a joint venture internet consultancy holding company called Seneca with Pegasus Partners.
Omnicom, headed by president and CEO John Wren, contributed resources to the new company from the stakes it held in Agency.com, Organic and Razorfish.
At the time, the two companies said the objective in forming the company was to maximise consolidation and other strategic opportunities. However, the move proved troublesome for Omnicom and led to a number of shareholder lawsuits.
At one stage in May, it sparked a 20% plummet in its share price after questions were raised about the transfer of the internet companies with a combined value of around $280m (£192m).
The issue led to the resignation from the board of one of Omnicom's longest-serving directors, who quit the company over concerns about the way the advertising group has handled its internet assets and other corporate governance issues.
Robert Callander, a former chairman of the board's audit committee, was reported to be unhappy with the group management's limited disclosure to the audit committee over internet assets.
Wren was forced to make a statement over the issue, saying: "There is no controversy on the board. We fully support the company's strategy, and are confident in its operating results, accounting practices and financial disclosures."
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