Financial PR: Europe’s M&A market favours UK agencies - The slew of UK privatisations under the Tories gave London financial. PR agencies a headstart when Europe followed suit in the early 1990s and they are maintaining that advantage with t

Since the beginning of the year, the highest profile work keeping London’s financial PR agencies busy has come from outside the UK.

Since the beginning of the year, the highest profile work keeping

London’s financial PR agencies busy has come from outside the UK.



Italian-based Olivetti, for example, has hired Citigate Dewe Rogerson to

handle its pounds 35 billion hostile take-over bid for Telecom Italia,

which is itself using Brunswick. Brunswick is also working for Gucci as

the fashion empire, hoping for a merger with French retail conglomerate

Pinault-Printemps-Redoute, which has retained French agency Finacom,

finds itself the subject of a pounds 3 billion hostile take-over bid by

luxury goods giant LVMH, which in turn retains Financial Dynamics.



Meanwhile, Banque Nationale de Paris is using Brunswick and Hill and

Knowlton as it tries to create France’s largest banking group by

launching a hostile bid for rivals Societe Generale and Paribas (PR

Week, 2 April).



The latter retain Citigate Dewe Rogerson.



’In the past six months, the growth in European mergers and acquisitions

(M&As) has been phenomenal,’ confirms Cary Martin, deputy chairman of

Citigate Dewe Rogerson.



The increase in mergers and acquisitions in continental Europe is a

natural consequence of the privatisation of state companies and opening

up of internal markets in European Union countries.



Former state-owned companies like Telecom Italia are now open to

take-over and have been given the freedom to move out of their home

markets and expand through M&As abroad. Other businesses are

consolidating in expectation of increased competition from foreign

companies entering their home markets.



The UK’s slightly earlier run of privatisations meant City PR agencies

already had the experience needed on the Continent and were in a prime

position to win business in the early 1990s, which allowed them to build

their reputations in Europe.



’Since 1994, Dewe Rogerson has handled 150 share offers in Europe,’ says

Martin. ’We are now applying that expertise to the M&As market.’



According to Financial Dynamics international financial director Hugh

Morrison, well over 30 per cent of the agency’s income is now generated

from its work on M&As taking place outside the UK.



UK agencies are being approached not only for their experience, but also

for their ability to address a wide range of investors from London.

European companies often look to attract US investors to help finance

their mergers and acquisitions, as most US money in Europe is managed

from London. In addition, the investment banks advising on these deals,

such as Morgan Stanley, Goldman Sachs and Merrill Lynch, have their

European headquarters in London.



Although UK agencies have successfully secured a seat on the gravy train

of continental mergers and acquisitions, as they did ten years ago with

privatisations, there is one major difference. When continental

privatisations began, local agencies played a minor role, if any, in

flotations. Although they would sometimes team up with local partners,

UK agencies were appointed lead advisers and would take the lion’s share

of the fees.



Over the last ten years, financial agencies such as Italy’s Barabino and

Partners and France’s Finacom have emerged on the Continent and the

recent spate of deals has seen UK agencies working alongside, as well as

co-ordinating, local agencies.



Financial Dynamics has been LVMH’s UK agency since 1997, and is

co-ordinating the company’s PR across Europe and the US. ’We report

directly to LVMH chairman Bernard Arnault because we need to be close to

the strategic vision and we can’t learn that second-hand,’ says

Morrison.



Financial Dynamics helped select local agencies working in all the major

markets involved in the deal: the US, France, the UK, Holland and Italy,

and although FD co-ordinates their work, including that of the French

agency Euro RSCG Corporate, any of the local agencies may be leading the

account at any time, depending on the country where the take-over battle

is focused.



In its battle to take over Telecom Italia Olivetti’s agencies are

working on an equal footing, with no overall lead agency. Barabino and

Partners, and the Maitland Consultancy and Citigate Dewe Rogerson in the

UK, all report to Olivetti’s chief executive Roberto Colaninno and

Vittorio Meloni, head of corporate relations. In total a team of up to

20 PR people, including agency and in-house staff, are working on

Olivetti’s behalf at any given time.



However, Maitland and Citigate Dewe Rogerson have a wider brief than

Barabino, which is concentrating on the Italian press. The two UK

agencies are working on investor relations, internal communications and

advertising.



Despite the growing role continental agencies are playing in European

M&As, the evidence is that the major co-ordinating roles continue to be

awarded to the more experienced UK agencies.



However, Richard Holloway, a Maitland Consultancy partner, warns: ’UK

agencies are continually adding to their experience and have a

significant head start, but that is not to say they have the field

exclusively to themselves.’



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