The following article has appeared on Reuters this morning:
01:41 20Apr2004 RTRS-UPDATE 1-Interpublic ends Grand Prix contract, sees charges
(Adds background, CEO statement)
LOS ANGELES, April 19 (Reuters) - The Interpublic Group of Companies <IPG.N>, the world's No. 2 advertising group, said on Monday it would take a $93 million second-quarter charge in order to be released early from its British Grand Prix contract.
Interpublic, home to agencies such as McCann-Erickson and Foote, Cone & Belding, has been cutting costs and shedding peripheral operations acquired during a buying spree over the last decade. In the fourth-quarter, the company took a $38 million charge for selling four British auto racing tracks.
In a statement issued after the close of trading on Monday, Interpublic said that in exchange for the early termination of its British Grand Prix contract, which had been set to run until 2015, it had agreed to pay $93 million to Formula One Administration Ltd.
The company said it still had lease and other obligations related to the Silverstone auto racing circuit, which hosts the British Grand Prix. It said those obligations would total near $62 million and would be paid through the end of 2007.
"This is another important step in our turnaround," said Interpublic Chairman and CEO David Bell. "From the point at which I was asked to lead this company, I have made it clear that it is inappropriate for us to be involved in owning or operating venue-based motor sports businesses. We are pleased to have moved closer to completing our exit from the motor sports business."
Interpublic shares closed up about 1 percent at $16.18 on Monday on the New York Stock Exchange. The stock is up about 4 percent since the start of the year.
The company is also the subject of a U.S. Securities and Exchange Commission probe into its restatement of earnings from 1997 to early 2002.
((Reporting by Kevin Krolicki, editing by Michael Miller; Reuters Messaging:
kevin.krolicki@reuters.com@reuters.net; 1-213-955-6760))