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Interpublic chief financial officer says tender offer represents shift toward deploying more cash
By Jennifer Lanning Drey
Portland, Ore., June 10 - Interpublic Group of Cos., Inc.'s recent tender offer for its 5.25% convertibles can be taken as a sign that the company is getting more comfortable with deploying some of its excess capital, Frank Mergenthaler, its chief financial officer, said Thursday at the BMO Capital Markets Advertising & Marketing Services Conference.
"You can expect that as we get more and more comfort with macro-economic trends and our business in 2010, we'll put more of our liquidity to work. Whether that's in share buybacks, whether that's in continuing to look at our balance sheet, we're not sure yet, but we took the first step with the converts," he said.
At the same time, reinvesting in the business will remain Interpublic's top priority for its cash, Mergenthaler said.
While the company has a lot of potential uses for excess cash, Mergenthaler later noted that Interpublic will continue to look at its balance sheet and capital structure over the next 12 to 18 months.
Mergenthaler also said achieving investment-grade ratings is important to Interpublic, but the goal will not necessarily dictate the company's decisions regarding its uses of cash.
"We're not going to do anything unnatural or anything that will harm the long-term value proposition of our business to achieve investment grade," he said.
"If we believe it's prudent to do something with excess cash at a specific time, we'll work with the agencies, but they're not going to drive our decision making."
Interpublic is a New York-based provider of advertising and marketing services.
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