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Publicis tipped to swoop on faltering Interpublic

NEW YORK - Publicis Groupe is understood to considering a bid for its larger US rival Interpublic Group, which would create the world's biggest advertising group.

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US media have reported over the weekend that ailing Interpublic is on a list of potential acquisitions Publicis CEO Maurice Levy will present to the French group's management and its board this week in Paris. Interactive agency Digitas and UK media buying and market research group Aegis were also named as targets.

Levy, who said in October that he is "contemplating several possible strategies in terms of acquisitions" and in November ruled out Aegis, issued a denial of the Interpublic link.

If a Publicis-Interpublic deal came off, the combination of the world's fourth and third largest groups would see them become the global leader with £6bn in annual revenues. Current number one Omnicom Group and number two WPP Group generate around £5bn each.

Fifth-placed Dentsu of Japan could also be involved in a potential deal. It owns 15% of Publicis and could help it finance a purchase of Interpublic, which owns the advertising agencies McCann-Erickson and Draft FCB and the media planning and buying agencies Initiative and Universal McCann.

Interpublic has long been surrounded by speculation it will fall victim to a takeover, after it got itself into financial trouble following an aggressive expansion strategy during the 1990s and the accounting problems that resulted.

Publicly quoted, it is currently valued at $5.3bn. The recent fall in value of the dollar has brought it more within reach of a non-US company, such as France-based Publicis. Interpublic's value in Euros is €3.99bn and in Sterling is £2.69bn.

The last big company Levy was interested in was Aegis. In September, last year it emerged that he had been in talks with Aegis about a possible £1.56bn takeover. It then transpired that Vincent Bollore, the Havas chairman, had built up a 9% stake in Aegis, which Bollore eventually took to 29% this year, and Levy withdrew in November 2005.

Levy did not entirely rule out a bid for Aegis last month, but said that he had no interest in the company while Bollore was a shareholder.

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