IT’S one of those quirks of fate that Robert Lerwill, chief executive of Aegis, not only competes head-to-head with his former boss, Sir Martin Sorrell, — he looks a bit like him, too.
“Yeah, I can remember when we bought J Walter Thompson,” says Lerwill. “Martin and I walked into JWT’s boardroom on Madison Avenue and you could see them thinking: who are these podgy little English guys with their alphabet-soup company?”
That was 20 years ago. Now Lerwill, 54, formerly finance director at Sorrell’s WPP, runs the Aegis media-buying group, and it’s fair to say that the two rivals — both stocky, bespectacled and fond of double-breasted suits — are no longer best mates. Sorrell is one of the predators who have been circling Aegis for the past 18 months, making hungry noises about breaking it up.
“We do bump into each other occasionally,” says Lerwill cautiously, when I ask how they get on. “I worked alongside him for 10 years so it’s natural we should exchange pleasantries.” Then he asks if we can talk about Aegis, please.
Enough said. Sorrell won’t even talk about Lerwill on the record. It’s a rivalry that would be incidental to Aegis’s shareholders were the fortunes of both not so delicately intertwined. It also adds to the soap-like drama of everything that clings to Aegis.
Lerwill’s tenure at the top even started in controversy — he was already a non-executive director on Aegis’s board before becoming chief executive. That led some to wonder how widely the company had looked when former boss Doug Flynn departed for Rentokil.
Lerwill was available because he left Cable & Wireless (C&W) in 2003 after the telecoms giant’s fortunes had nosedived. That also gave Aegis’s predators easy ammunition.
Aegis has rarely been out of the headlines since. First the French investor Vincent Bolloré, who also sits as chairman of the rival media group Havas, bought a sizeable stake. Then the French advertising giant Publicis opened takeover talks.
After that, Sorrell emerged. He had teamed up with the American private-equity firm Hellman & Friedman, another interested bidder. He later reached agreement with Bolloré about a second offer.
The interest from all parties came to nought, but this year Bolloré returned, having built up a 29% stake in the group, asking for representation on the board. Aegis refused, citing his role at Havas as a conflict of interest.
Bolloré lost a vote on the issue at the Aegis shareholders’ meeting last month, but promises to be back. All of that is still going on, along with whispers from the predators that Aegis’s board, in ducking the offers, has not been acting in its shareholders’ best interests. Aegis, they say, is a dead man walking.
Yet financially the company looks anything but. Its preliminary results in March showed revenue up 16% in 2005 to £870m. And Lerwill, like the ship’s captain clutching the wheel with one hand while repelling boarders with the other, has been in the thick of it from the start.
Tough? He shrugs. “It’s within my competencies to deal with it.” He has, he points out, seen these kinds of things from every angle in a career that has included long stints at Arthur Andersen, WPP and C&W. He helped to refinance WPP when it was close to the brink in the early 1990s. He doesn’t need my sympathy.
And sitting at the meeting table in his airy office overlooking London’s Portman Square, Lerwill looks as if he can take the pressure. Squat, square-faced and bulky like an ageing rugby hooker, he bats off personal questions with a dry sense of humour, before letting loose a torrent of explication dissecting Aegis’s complex marketplaces.
Far from toughing it out, he says he’s actually enjoying the attention the company gets. “The focus has made people appreciate far more what we do and how successful we have become,” he said.
But surely the friction with Bolloré and Sorrell is an unwanted distraction?
Lerwill smiles tightly. “Bolloré is chairman of Havas whose media agency, MPG, competes with our agency, Carat, and in our board meetings we are actively talking about clients, remuneration, acquisitions and people to hire.”
So for him to have representation would be a clear conflict of interest. “It would be like me buying 5% of WPP and sitting on their board,” says Lerwill, smiling. “It’s not going to happen.” As for Sorrell, Lerwill makes light of any feud — it’s known he attended the WPP 20-year reunion, and harbours no grudges. One former colleague says both men just enjoy the battle. “And Robert acknowledges he learnt a lot from Martin,” he said.
Another who has worked with both suggests the similarities go beyond pugnacity. Both men are highly numerate, quick- witted and tough. “Like a lot of people, Martin is most demanding of those who are closest to him in skills, and Robert keeps his cool very well — he was missed when he left WPP.”
That cool is invaluable at the moment. Some feel it’s inevitable that Lerwill will have to accede to an offer for Aegis, the last sizeable media buyer independent of a full-service advertising-agency group.
Sorrell wants Aegis’s market- research arm, Synovate. Bolloré would like to combine MPG and Carat. Others covet Aegis’s digital arm, Isobar.
But Lerwill says the logic of joining a full-service network is not so obvious. “Neutrality of advice to clients — how much to spend on television, how much to spend on outdoor, and so on — is a huge selling point for us. If you are linked with creative agencies, the suspicion in the clients’ minds is that you are being unduly influenced by the agency next door.”
And shareholders should bear that in mind when full- service groups come offering bundles of money. Lerwill’s chairman, Lord Sharman, says the key thing is that Aegis’s performance keeps improving, despite all the distractions. His chief executive’s deft touch with people has also proved a bonus.
“Robert’s kept the business on an even keel, and it hasn’t affected our hirings. He was always really highly regarded not just by the other non- executives on the board, but by the executive team, too.”
Sharman adds it was that, plus Lerwill’s finance experience, which persuaded the board to choose the internal candidate. Lerwill had long been the board’s “under-the-bus” man — the director who would step in temporarily should an accident befall the chief executive. In the end, he had all the qualities they were looking for.
Given that Sorrell was among the predators circling Aegis, surely Lerwill’s WPP know-how must have been vital, too?
Sharman and Lerwill deny it, citing internal focus, rather than external, as vital. “And I have a lot of international experience,” smiles Lerwill, “in a footprint not dissimilar to Aegis’s.”
That experience came early, working for Arthur Andersen. Lerwill plumped for accountancy after university, “because it seemed a good introduction to the general business world”. His parents ran pubs on the south coast. He was the eldest of three children, well used to “bottling up” in the pub before he went to school.
“Friends of my parents who were accountants had done well,” he says, explaining his career choice. Andersen sent him to Russia, Oman and elsewhere. But after 12 years he jumped into WPP — he was Sorrell’s first hiring — because he wanted a fresh challenge. “It was that or become a partner,” he explains.
He stayed at WPP for 10 years and left only because C&W offered him the chance to be finance director at a FTSE 100 company. “Believe it or not, WPP wasn’t in the FTSE by 1996,” Lerwill adds.
At C&W he worked under first Dick Brown, then Graham Wallace, who pipped him to the chief-executive slot, then persuaded him to stay.
Lerwill ended up in charge of C&W Regional — “the old, profitable bit” — which had interests in telecoms companies across the Commonwealth. His job was to sell the companies that C&W didn’t fully own, and help steer its monopoly licences into competitive markets. But in America and the UK, outside his watch, C&W hit difficulties.
Did it tarnish his career? “I don’t see that,” he says, before offering a detailed dissection of his contribution to C&W's bottom line: “£1.5 billion of revenues, making £400m or £500m a year.” Twice the turnover, he adds, of Aegis.
And global perspective helps in his current job, too. Aegis is expanding rapidly in Asia and Lerwill loves to travel. In June he was in Japan, Hong Kong, South Africa, France and Italy. To understand Aegis’s businesses, he says, he has to go there, experience the media, and feel the place. “At times it’s a chore but at heart I like it. If I don’t travel, I miss it.”
He is on his second marriage, and has three children under 11 to add to grown-up children from his first marriage. “Maybe my family are sometimes glad to see the back of me,” he grins.
Aegis’s predators, on the other hand, would like to see more of him. They think he should be negotiating a sale, not sidestepping buyers while enjoying the perks that go with a £1.1m salary package.
Lerwill, a collector of fine wine, doesn’t budge when I put it to him. “People can say what they want to the press,” he shrugs, refusing to get rattled.
Certainly he’s not as narrow as some paint him. Lerwill’s friends cite his work both as a director of the Anthony Nolan bone-marrow trust and in higher education, as one of the advisory team that has helped to transform Nottingham University into one of the most popular campuses in Britain. These show he is about more than just making money.
But in the end, that’s how his time at Aegis will be judged. He knows it and he’s bullish.
“All the developments in media and in research have been in our favour, we are in the sweet spot — clients are more focused on getting value,” he says.
New-business wins are up, its digital arm shows organic growth, the company is hiring good people and expanding through acquisition. He sees no threat from a global economic downturn. “People often spend themselves out of wobbles.”
Yet Bolloré and Sorrell are still circling. “We are expecting the unexpected,” says Sharman.
For Lerwill, it’s pretty much a habit now.
Vital statistics
Born: January 21, 1952
Marital status: married twice, with five children
School: Gosport Grammar
University: Nottingham
First job: accountant at Arthur Andersen
Salary package: £1.1m, including bonus
Car: silver BMW 7 series
Homes: Chelmsford and Islington
Favourite book: The Leopard by Giuseppe di Lampedusa
Favourite music: Madame Butterfly
Favourite film: Top Gun
Favourite gadget: Ipod docking speakers
Last holiday: Nare Hotel, Cornwall
Robert Lerwill's Working Day
THE Aegis chief executive wakes at his home outside Chelmsford before 6am. Robert Lerwill is picked up at 6.30am and driven to his London office for an 8am start.
“Every day is different, but mostly it’s meetings, half external, half internal.” He has nine executives reporting directly to him — “about three too many, but don’t get anybody worried!” He often lunches with contacts at Brown’s Grill and then works until the evening, attending media functions. Most weeks he travels, too. “I like to get to even the smallest markets once a year. It stays with you.” Last month he was at the Cannes advertising festival. “It may be a jolly to some but clients go there a lot.”
The lifestyle is inevitably unhealthy. “I do take exercise – I walk from check-in desk to departure gate and carry my own bags.”
Downtime
ROBERT LERWILL spends his money on fine wine.
“I gave a wish-list to my wine merchant this year for the wine I wanted to buy en primeur. He came back gleefully with most of it. Then he showed me the prices — astronomical. Normally I’d pay £200-£400 a case. These are over £1,000. And some you can’t drink for 15 years.”
He has an air-conditioned cellar for his wine collection at his home in Essex. He also likes buying pictures of houses. “A psychologist would be interested in that, no doubt,” he laughs. He enjoys spectator sports, too, in particular rugby, horse-racing and motor-racing.
But his ideal Sunday is just spent quietly, with friends coming over for lunch. “There is some overlap between my friends and work, but I try to keep my closest friends outside business.”
