Newly public investment bank Moelis & Co took a hit on Friday when the $35 billion merger of Publicis Groupe SA and Moelis client Omnicom Group Inc fell through, costing an estimated tens of millions of dollars in fees to advisers who had worked on the deal more than a year. Moelis acted as lead financial adviser to U.S. advertising agency Omnicom while Rothschild advised its French rival Publicis. On Thursday, the companies announced their abandonment of a deal that would have created the world's largest advertising agency.Shareholders bought into the Moelis initial public offering in April banking on its ability to generate revenue from such marquee transactions. Still, one large transaction does not really move the needle for firms like Moelis, which generated $411.4 million in revenue last year.Hours after the deal collapsed, shares of Moelis were largely flat, down 0.6 percent to $26.13 on the New York Stock Exchange.Consulting firm Freeman & Co LLC estimates that banks led by Moelis and Rothschild would have split around $70 million in advisory fees, but people familiar with the matter said the actual fee arrangement was substantially lower. Representatives for Moelis and Rothschild declined to comment.
Omnicom Group Inc. (Omnicom) is a holding company, providing professional services to clients through multiple agencies. Shares of OMC traded higher by 0.32% or $0.21/share to $66.41. In the past year, the shares have traded as low as $59.70 and as high as $76.87. On average, 1642330 shares of OMC exchange hands on a given day and today's volume is recorded at 8986162.
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