Aegis in row with WPP agency over poaching allegations

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The Independent Online

The Paris offices of an affiliate of the advertising giant WPP have been raided by French court investigators investigating alleged client-poaching from its rival Aegis.

The Paris offices of an affiliate of the advertising giant WPP have been raided by French court investigators investigating alleged client-poaching from its rival Aegis.

Documents have been seized from KR Media, one-fifth owned by WPP, and shown to a judge.

KR is headed by the advertising veterans Eryck Rebbouh and Bruno Kemoun, former employees of Aegis's Carat France arm. The pair, known as "the Twins", quit Aegis a year ago after a dispute with its Australian boss, Doug Flynn, over strategy. They set up KR and stand accused of wooing Aegis clients, despite signing an agreement not to do so.

The dispute hinges on the wording of the agreement and whether they actively pursued business before its expiry at the end of the month.

Mr Kemoun, 47, and Mr Rebbouh, 48, are among the world's most powerful figures in the advertising industry. The Frenchmen met in 1981 and formed an enduring partnership, building Carat, Europe's biggest advertising planning and media buying group. In 1991, they were made joint heads of Aegis' European operations, leaving in November last year to set up KR. Both earn the same wage and have equal stakes in the business.

The legal wrangle follows a series of high-profile client defections from Aegis to KR, including the luxury goods giant LVMH, Bouygues Telecom and the chocolate maker Ferrero.

Despite the dispute, Aegis reassured investors yesterday that it is on track to hit profit targets for the year after a "modest recovery" in advertising spending. Analysts expect annual profits of £92.5m, up from £80.5m last time.

Aegis said its media businesses performed well in the first 11 months of the year, with turnover ahead of 2003. Its market research arm, Synovate, made sound progress, particularly in Europe and Asia- Pacific. Further growth is expected next year.

Frederik Kooij, at Credit Suisse First Boston, said: "Aegis's trading statement gives little away but may placate concerns that growth stalled in the second half. We probably have some scope to nudge up numbers at some stage." Numis told clients to add to their holdings of the shares, for which it has set a target price of 118p. They closed 0.75p lower at 102.5p.

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