May 11, 2006 6:04 AM, PROMO Xtra, By Patricia Odell

After weeks of speculation, Michael Roth, the CEO of the Interpublic Group of Cos. sought to dispel rumors of a merger between Draft and Foote Cone & Belding, during an earnings conference call yesterday.

Roth said that one avenue for the struggling conglomerate would be to "align or combine" two of its key assets under a single management team with a go-to-market strategy.

In referring to a potential alliance between Draft and FCB, he said that an alliance is being considered and that the cultures and offerings of the two companies are highly complementary.

"Both of these companies are doing well in the marketplace—and both could be doing even better with access to capabilities or geographic reach that the other would bring to the table," he said.

He added that unlike previous mergers, which may have been about size and scale or propping up a weak asset, any alliance would "be about being responsive to the needs of clients, who are asking for our help in connecting with consumers in a multi-channel media world."

The heads of Draft and FCB approached Interpublic independently, which is in the midst of a turnaround strategy, with the possibility of the two working more closely together. The senior management teams have been supportive of an alliance, Roth said.

Roth said he was disappointed that word of a possible alliance had leaked to the public in past weeks and cautioned that it is too early to tell if an alliance would take place.

"That won't cause us to make a determination or move forward until we have thoroughly reviewed the financial and marketplace implications of a move," he said. "We expect to finalize our thinking in the upcoming few weeks."

Interpublic, the world's No. 3 ad agency, has been struggling. The advertising and marketing conglomerate's first quarter loss widened on flat revenue to $170 million versus $146 million one year ago. Organic revenue grew 4.8%, to $63.5 million.

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