Credit: Nhia Moua via Unsplash
Staff at Clemenger holding shares in the agency are about to split a $79 million payout as Omnicom moves to take full control.
The share buyout, on top of a special dividend, comes ahead of Omnicom taking over competitor IPG, expected before the end of the year.
According to a Scheme of Arrangement lodged with corporate regulator ASIC, Omnicom wants to scoop up the shares it doesn’t own in Clemenger, going to 100% of the business from 86.84%.
The deal is to pay $3.37 a share on top of a special dividend of six cents a share, fully franked, meaning that this becomes a tax credit.
An independent expert has determined this is more than 10% above the midpoint of valuation of the shares, which in the past had been difficult to fully realise the value of because the company is a private one.
The shares that Omnicom doesn’t own include 18,747,000 in Australia and 4,353,500 in New Zealand.
At $3.37 each, this adds up to $77.8 million. With the special dividend, shareholders will be sharing more than $79 million.
The scheme described the offer as a “unique” opportunity to realise the value of investment in Clemenger, an unlisted entity with little liquidity among shares.
A committee, comprising now former Clemenger chair Robert Morgan, CFO Adrian Ciabotti and Colenso BBDO CEO Angela Watson, negotiated the deal with Omnicom.
Morgan, in a letter to shareholders, said the committee unanimously recommended the offer. An independent expert had described the offer as “fair and reasonable.
Morgan, who was hired 46 years ago by Peter Clemenger as an account executive, retired in June this year as chairman of the Clemenger Group.
Clemenger board directors intend to vote in favour of the sale to Omnicom.
Staff with shares under the Employee Share Assistance Scheme will have any loans repaid, receiving in their pay packets any funds remaining.
Clemenger shareholders are due to vote tomorrow (October 14) on the deal. The result then goes to the Federal Court for ratification.
The company had net assets of $237.3 million at the end of June.
Clemenger reported commissions and fees of $301.89 million for the year to December 2024, according to documents lodged with ASIC. Net profit was $44.33 million.
Last year Clemenger declared 12.75 cents a share in dividends, a total of $22,376,250. In February this year, directors recommended a dividend of 11.25 cents a share, a total of $19,743,750.
The then John Clemenger agency opened its doors in Melbourne in 1946. John’s 18-year-old son Peter was there at the beginning.
A third of the business was sold to Omnicom’s BBDO in 1972, and one third of then went to staff. The Clemenger’s had the rest.
Omnicom took a majority holding in 2010, meaning the company then was no longer Australian owned.
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