LONDON (Brand Republic) - Senior management at Dentsu, Japan’s largest advertising agency, is expected to meet investors in Europe and the US next week in a bid to reassure them ahead of its planned autumn IPO.
The offering could raise as much as $2bn (£1.38bn), but may be hampered by the agency’s low profile internationally and a recent slump in the Japanese stock market. Despite revenues of Y1,500bn (£8.78bn) and an estimated market capitalisation of between $20bn (£13.75bn) and $30bn (£20.63bn), it is not widely regarded as a global company by analysts.
Japan’s media and marketing industry is mostly unexposed to foreign investment and only Asatsu DK, of which the WPP Group owns 20%, is publicly traded. But analysts’ predictions that the Japanese advertising industry will not share the slump faced by its counterpart in the US have already been borne out by a 7.2% rise in advertising spend to Y6,110bn (£35.78bn), the first increase in three years.
Dentsu’s past dealings with foreign groups -- a 10-year joint venture with Young & Rubicam and last year’s purchase of a 20% stake in B|Com3 -- have been criticised by industry observers for not being successful ventures.
There is longstanding industry speculation, however, that the group plans to take a bigger stake in B|Com3.