Dentsu to push ahead with flotation

TOKYO - Despite the downturn, Japanese advertising giant Dentsu is to push ahead with its IPO on the Tokyo Stock Exchange and has named November 30 as the day it will float.

However, the size of the offering has been significantly scaled back in the face of the downturn and a weak Japanese stock market. Dentsu will look to raise as much as £308m, which is still some way short of the £1.1bn figure it had once been looking at.



According to analysts, however, the flotation is being seen as much as a strategic move as it is a financial one.



The listing will give Dentsu the cash it needs to compete with rivals WPP Group and Omnicom Group. Although Dentsu dominates the Japanese advertising market, it has traditionally been weak. It is likely to use the cash to help fund acquisitions in the US and Europe, where it already owns 20% of B|Com3.



Dentsu plans to offer 25,000 new shares ahead of the listing, bringing the number of shares outstanding to 1.39m. A further 110,000 existing shares will be sold to the public in a secondary offering. The majority of those will be sold in Japan with the remainder offered overseas.



In the UK last month, Dentsu merged its two UK agencies, CDP and travissully. The merger came less than four months after CDP lost its showpiece £20m Honda account.



The merger created a new agency called cdp-travissully with billings of around £40m. Many industry observers were surprised that Dentsu did not move ahead and rebrand the agency under the Dentsu name.




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