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Opinion 2 Dec 2019 - 5 min read

Dentsued: Private equity next for Henry Tajer?

By Paul McIntyre - Executive Editor
Henry Tajer

It must have been a rip-snorting clash between clans - an army of corporates from Japan's media-advertising oligarch, Dentsu, and its global media network, Dentsu Aegis, facing off against two Australian industry heavies who global management clearly deemed had gone rogue. The question is, on what?      

Henry Tajer and Reg Davidson must have turned recalcitrant.

Just 10 months ago Tajer was appointed CEO of Dentsu Aegis Network (DAN) in Australia, joined promptly by Davidson as chief financial officer. They were handed a remit to shake-up, clean out and reinvent DAN’s troubled Australian arm.

That overhaul was well underway until last week’s bolt from above, resulting in Tajer and Davidson’s rapid ousting.

The rationale can’t have been exclusively related to DAN’s streak of big client losses here. That was in train for some time before Tajer’s arrival and DAN’s international brass would have known that. There's something more.

Indeed, the circumstances and handling of Tajer and Davidson’s exit remain perplexing. Pardon the French, but some really big shit must have gone down.

Tajer certainly just copped a surge and purge from his corporate masters that he’s been orchestrating for much of this year on the Australian business.

But there were signs the group was making progress, addressing some of its more creative practices in media trading, noted privately of late by media companies. Indeed, there were signs DAN's expertise in monetising media were changing. Tajer was consistently in market with media owners and clients signalling DAN needed and was going to do things very differently. Even rivals remain bemused. “Henry was definitely the best guy to turn it around,” says one competitor. “What are they going to do?” 

Until we hear in full from the Dentsu camp – both newly appointed APAC CEO Ashish Bhasin and the new Australian CEO, Angela Tangas - it will remain everyone’s guess. DAN staff are still to be addressed by Tangas or regional management but no doubt it's coming.  

Whatever the trigger - and there's no hiding this was a dramatic and disruptive move from DAN's international heavies - Tajer’s strategy was directionally correct. He was the earliest of the local big holding companies in this Mi3 piece to articulate diversifying more heavily out of media, creative and digital comms into tech, customer experience, data and digital business transformation services. Publicis Groupe CEO Mike Rebelo holds similar views in this Mi3 Leader interview and WPP’s new Euro import, Jens Monsees, is talking in similar terms.

To be clear about Tajer's mandate, it was beyond the media buying business and beyond advertising. In an Mi3 interview in June he said: “We're working towards really having the capabilities to be competing in a different market to what most of us believe the market is and it's not just the ad market. In particular, the media business seems to have been front-of-house. But we have capabilities that already have us competing with other organisations that are not our traditional holding company competitors. A big part of our business, more than half of it, is really competing against Deloitte, Accenture, CapGemini and larger independent solutions firms. That's a really, really exciting part of the business that we will continue to expand and we'll have more to announce on that pretty soon.”

That’s absolutely the requisite big picture perspective if any of the holding companies are going to reinvent their capabilities and revenue models. 

Let’s see whether the new DAN regime will stick to this track or revert to its old ways as a media-led horse. It will be hard to resist - all of the global holding companies are still overweight in earnings that come from their media trading arms. And a chunk of those earnings from the holding companies were historically derived from the what financial auditors might call the equivalent of “creative accounting”. That's been well covered by the substantial ANA report in 2017.     

But what of Tajer? He’s now busted up with two of the big four global holding companies - IPG and Dentsu. WPP is off the table unless it’s new CEO, Jens Monsees, fails fast (Tajer’s exit shows anything is possible) while Publicis and Omnicom seem to have entrenched senior leadership.

That leaves the rumblings which have already started around either Sir Martin Sorrell’s S4 Capital out of Singapore or private equity as among Tajer’s next options. It's unknown how long Tajer's non-compete clause is but six months is a reasonable assumption.   

Hamish McLennan, former WPP veteran and current deputy chairman of $92bn investment firm, Magellan, argued in this Mi3 conversation in October that private equity, consultants, or a combination of the two, could break up communications holding companies within the next three years. The tougher the market gets, the more likely that outcome, he says. 

Whether it’s conglomerate break-ups, tie-ups or independent roll-ups, what Tajer and his ex-speed date at Dentsu do next will be telling - and important. But you get the sense there’s a lot more yet to play out on this one. 

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