Aegis Review 'Could Prompt Synovate Sale'

British marcoms group Aegis has commissioned a review of the business which could result in the spin-off of its market research arm Synovate, according to a report in UK newspaper The Sunday Times.

Investment bank Merrill Lynch has been assigned the task of finding the most appropriate operating structure for the group by Chairman and Interim CEO John Napier, who replaced former CEO Robert Lerwill last November.

The Times also speculated that a review could result in the group forging closer ties with its largest shareholder Vincent Bolloré, who owns almost 30% of Aegis and is Chairman of rival group Havas.

Bolloré, who has been attempting to appoint his own directors to the Aegis Board for some time, has previously called for stronger links between the two groups and been tipped to launch a takeover of Aegis. Last month, he said he felt more confident of securing the two boardroom seats after meeting with Napier.

Lerwill, who led the company for nearly four years, was opposed to breaking-up the group through the sale of Synovate and had also resisted all attempts by Bolloré to secure the Board seats.

The call for Synovate's services - which represent a quarter of the group's earnings - has recently declined in the US market, and the firm has also warned of slowing demand in the UK, US and Spain. Napier, who has close ties with Merrill Lynch, is understood to favour a change in strategy.

Aegis shares have risen substantially since Lerwill departed - having declined to 48p before he left and then risen to 60p in early December. This morning they were trading at 77.5p, which is still considerably less than the 115p seen a few months ago.

Web sites: www.aegisplc.com and www.synovate.com .