Sorrell's WPP targets US ad agency

SIR Martin Sorrell's marketing services group WPP is targeting US advertising agency Grey Global amid indications that the American firm's key client, Procter & Gamble, would not object to WPP's links with rival Unilever.

Grey, the seventh-biggest advertising group in the world with a stock market capitalisation of $1.3 billion (£630 million), has retained top investment banks Goldman Sachs and JP Morgan to sound out potential buyers.

Sources close to WPP say that the British firm - the world's second-biggest advertising group and worth £6.55 billion - is now looking closely at the business. Household products giant P&G is Grey's biggest client and it traditionally refuses to be part of an agency group that handles Anglo-Dutch Unilever, an important worldwide client of WPP.

WPP's French rival Publicis has been touted as the favourite to sign up Grey Global since it handles virtually all the remaining P&G accounts outside Grey.

Omnicom, the world's biggest advertising group, indicated on Friday that it would not bid.

However, industry sources suggest that P&G would not favour seeing all its advertising accounts controlled by a single company, fearing that its power of negotiation would be lessened.

This would give a considerable boost to WPP's chances of fending off Publicis should it decide to bid for Grey. P&G refused to comment.

Ed Meyer, chairman, president and chief executive of Grey Global, will effectively decide its destiny as he holds 59% of the voting shares.

Any takeover would produce a massive windfall for Meyer, 77, who has been at the company for five decades.