Omnicom man for Aegis job

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The Independent Online
OMNICOM, the big US advertising group, is planning to install one of its senior managers as the next chief executive of Aegis, the struggling UK media buyer in which it has a substantial stake.

Fears are mounting that Aegis will this week disclose exceptional write-offs of at least pounds 40m for last year - far worse than City expectations - pushing it into the red for the second consecutive year.

Omnicom, which helped to put together a pounds 160m refinancing last October, is considering putting in its own man as part of a massive clear-out at Aegis.

The name in the frame for the job, currently held by Charles Hochman, is Alfred Knobler, Omnicom's director of business strategy.

Although he is based in New York, Mr Knobler is a former managing director of Media Partnership, the media buyer jointly owned by Omnicom and Britain's WPP Group, parent company to the J Walter Thompson and Ogilvy & Mather agencies.

Industry experts believe that his strategic grasp of the global advertising market, as well as his background in the increasingly specialised media buying business, could be crucial to improving Aegis's performance.

Omnicom, with one seat on the Aegis board and 9 per cent of its equity, is already in a powerful position to influence the running of the group.

It is understood to have the tacit approval of Warburg Pincus, the US investment firm that owns 33 per cent of Aegis and is the biggest shareholder.

The two investors, together with Electra, the venture capital group, were instrumental in backing the pounds 60m rescue rights issue and pounds 100m debt-for-equity swap that took place last year.

Since then, Aegis has embarked on a huge cost-cutting drive, leading to about 300 job losses. Its palatial head office in Paris has also been closed, reviving hopes of a possible relocation to London after nearly two years.

Last year's write-off, to be disclosed on Thursday, is thought to reflect higher than expected rationalisation costs and the impact of accounting changes.

As a result the company could incur a taxable loss of about pounds 20m, compared with some City forecasts of a pounds 6m profit. But its underlying performance is understood to be in line with expectations.