Photon Group faces market rumours of breakup including sale of BMF and BWM to WPP

Market rumours suggest that Photon Group will be broken up, today’s Australian Financial Review reports.

According to the newspaper, the rumours – which are denied – suggest “One of Macquarie Group’s private equity funds has signed a heads of agreement to buy Photon’s retail field marketing division for $140m”.

The paper also reports a further rumour that WPP Group is looking to buy other parts including ad agencies BMF and BWM.  

Although the paper says that both WPP and Photon deny it, the move would make strategic sense. While WPP’s media agencies have largely got back on track over the last couple of years, many of its ad agencies, including The Campaign Palace and GPY&R Sydney are in the doldrums while Ogilvy and JWT are not making a major impact on the market.

The last week or so has seen Photon’s shares rise from about 3c to 3.6c, giving the company a market capitalisation of around $55m. The company’s debts still stand at more than $100m.

The AFR also suggests that Aegis Media, which owns Mitchells locally,  had looked at buying parts of Photon, “but the idea was scuttled by Mitchell executives”.

At the time of posting, the ASX was yet to open, so there had been no movement of Photon Group shares this morning.

Update: Shortly after the ASX opening, Photon Shares had jumped to 4c.


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