WPP still courting US ad agency

ADVERTISING giant WPP confirmed today that it is still in talks with US agency Grey Global, which is up for sale with a price tag of $1bn (£545m) or more.

'We're continuing to 'noodle' with it,' said WPP chief executive Sir Martin Sorrell. 'They have an impressive client list, including Procter & Gamble, the world's biggest advertiser, and we are getting plenty of valuable information. It's not doing us any harm.'

Sir Martin would not give a timescale for any possible deal but analysts said the auction may drag on as the vendors try to stimulate more bidding interest. WPP rival Publicis has said it is not interested.

Figures from WPP today were at the top end of City expectations, with a 6% rise in revenues taking them above £2bn for the first time at the half-year stage. Headline profit before tax grew almost 16% to £234.7m and the interim dividend is up 20% to 2.5p.

There has been a 'significant increase' in activity, with business boosted by the Euro 2004 football championship in June. The group is benefitting from the Olympics and the run-up to the US election. July has been particularly strong, said Sir Martin, with like-for-like revenues ahead by more than 6% against 4%-plus in the first half.

He remains cautious about the US economy after the elections but says that increased corporate spending may take up the slack of slower consumer spending. He has raised WPP's margin targets from 13.8% this year to 14.5% next year and at least 15% in 2006.