Well the excitement seemed short lived. I beleive this was the...

Well the excitement seemed short lived.

I beleive this was the cause of the excitement from the Sydney Morning Herald :-

- LISTED marketing services groups STW and Mitchell Communication have downplayed market speculation they were in advanced plans for a merger, although both sides admitted they were continuing to talk.

A merger of the two companies would dilute the 19.9 per cent stake that WPP has built in STW this year. WPP, whose headquarters are in London, must make a full takeover offer if it reaches 20 per cent ownership of STW.

Although much of the reporting of WPP's plans for STW to date has suggested hostile motives, STW executives have rejected the notion.

News of an STW-Mitchell merger surfaced this week when Mitchell's group executive chairman, Harold Mitchell, signalled that his company was broadening its expansion plans beyond media buying and digital marketing to include traditional advertising agencies.

Although not ruling out an interest in a merger with Mitchell, STW's executive chairman, Russell Tate, said a deal was not imminent. "Harold and I catch up at least twice a year and talk about the state of the world," he told the Herald. "We've had some recent discussions, although there's nothing we've got to say at the moment."

Mr Tate said the last time he had seen Mr Mitchell was "two or three weeks ago". Asked when he last had a phone conversation with Mr Mitchell, Mr Tate replied: "Go away." Mr Mitchell echoed Mr Tate's line: "Russell and I talk three times a year."

Mr Mitchell also played down the delayed expansion in Asia, in a joint venture with the French media-buying group MPG that he had touted to analysts earlier this year.

There have been suggestions that MPG is unconvinced about a 50-50 equity joint venture with the Mitchell group, and that the creation of a second media network in Asia to manage client conflicts should be branded Mitchell - a move Mr Mitchell is said to be pushing.

Mr Mitchell rejected the suggestions and said the delay was more about ensuring the restructuring of the Australian group was bedded down. "There's no difficulty or awkwardness anywhere [with MPG]," he said.

On the WPP front, STW's chief executive, Mike Connaghan, denied there was any hostility between the two companies, telling the industry journal AdNews that WPP's estimated $60 million STW share splurge was because "we are potentially cheap".

Mr Connaghan said that after a recent visit to Australia by WPP's chief executive, Sir Martin Sorrell, it was likely the two groups would strike more deals.

"Our relationship is probably going to be closer [rather] than further apart," he said. "Martin's got a couple of businesses down here that I don't think are travelling that well. It wouldn't surprise me … if he took the view that it would be a good thing to get STW involved from an equity point of view so we can have some influence."