When Aussie John Singleton calls his shareholders together Crikey is always there because it’s the only meeting of the year held in a bar and someone has throw a few curly questions at this uncouth six times married larrikin.

They didn’t disappoint on the first count, but unfortunately with the meeting done and dusted by 10:40am it was probably a bit too early even for this hardy trouper to go toe to toe with Singo for a few pre-lunch heart-starters.

Such an anti-climax from such a promising start when I got to the Singo reception for directions the receptionist told me “it’s in the bar down the corridor and keep going to your left”.

Before we get onto the business side of things, a few highlights from the colour commentary throughout the meeting:

* Chairman Mark Carnegie started off with the usual company meeting spray “Computershare, the company’s share registrars have informed me that the necessary quorum is present, 05” Halfway through the set piece, he knew these formalities just weren’t his bag and began to crack up. “Sorry,” he chuckled “I’m just reading from the script!” That set the tone for the rest of the meeting.

* The chairman advised the meeting that the Ernst and Young Corporate Finance boffins were in attendance, and quipped that shareholders could ask them some questions and make them earn their Independent Experts’ fees.

* Carnegie also read through the related party rules, which prohibit people with a direct interest in the outcome of the vote from voting. As he read through one typically tortuous piece of legalese, he joked “I’m not sure what that means but it sounds good!”

* When I popped up to ask a few questions as Crikey’s proxy, Singo made an aside along the lines of how much he missed not having Crikey at the meeting. I think his tongue was bursting through his cheek at that point.

* Chairman Mark Carnegie described the Mayne Man as a “genius”. Well, not directly at least. A shareholder got up to ask a question and started off with “I’m just an electrician so I don’t know much about investing”, at which point Carnegie cut him off and said “oh no if you own shares in Singleton you’re a genius”. You heard it first here folks, Stephen Mayne Singo group shareholder (if $100 qualifies as such) and genius.

* Another high profile, colourful company chairman came up in discussion and Singo wise-cracked that he’d be selling that company’s shares if he had any because the colourful company chairman (who shall remain nameless) has “lost the plot”! Singo backed off a bit and asked that he not be quoted on this one so we’ll keep the name of this company and its ebullient chairman under wraps.

* Singo noted how some people were suggesting the company should send gun director Russell Tate to London and run the show worldwide. Singo’s tactic to keep Tate anchored here was to employ his daughters in the Australian company. I wonder if Russell Tate is related to that other great of the advertising industry, Larry Tate of McMahon and Tate? (Ed: For those new subscribers who are unfamiliar with the gonzo musings of Crullers, he likes to slip in the odd junk culture reference on the sly every now and then.)

* After the close of business, the chairman took a few questions on the Singo group’s Indonesian tv venture, which is not quite looking as vulnerable as a rickety fishing boat trying to cross the Timor Sea, but is facing a few challenges. After someone mentioned that John Howard was currently enjoying our northern neighbour’s hospitality, Singo took the opportunity to suggest that “they should send John Howard back home from Indonesia in a boat and then turn it around!”

And now onto the business of the meeting, 05

The EGM was called to get shareholder approval for the Singleton Group Ltd (hereafter “the Singo group”) to acquire 49% of the J. Walter Thompson worldwide advertising agency from WPP in exchange for shares in the Singo group.

Following completion, the remaining 51% in JWT would be owned by WPP, who would also own 11.22% of the shares in the Singo group after the issue of the scrip by the Singo group.

While this would obviously dilute existing shareholders’ interest in the Singo group, the upside is that they pick up an interest in JWT, an operation that isn’t going gangbusters like the Singo group and therefore might arguably have greater scope for profit growth.

I’ll keep it that simple for now, because my brain is completely fried having tried to figure out the latest David Lynch film, Mulholland Drive, which I saw last night. Incidentally and I don’t think I’m embarrassing myself any more so than usual in asking this but if any Sole Subscriber can tell me what the heck that film was about, please drop me a line. But Naomi Watts and some other better-than-average-looking lass get their kit off a couple of times so I’ll agree with David Stratton and give it four and a half stars.

The chairman outlined the proposed acquisition and gave the company’s sell on why it should go ahead, then opened the floor for questions.

After exchanging pleasantries with the chairman, I opened up the bowling with a few deliveries courtesy of the Mayne Man. I did my best to bamboozle the batsmen but it turned out that they really were just a bunch of Mark Waugh nude nuts nothing on them at all.

My first question was whether there would be any loss of clients through a perceived conflict of interest when Singo clients and JWT clients came under the one umbrella.

Russell Tate stepped onto the front foot and put this one right out of the park, saying that the clients were already under the worldwide WPP group anyway, and there would be no reason to think that there would be any client attrition.

The directors noted as well that the existing Singo group and the existing JWT group would continue to operate as distinct business units, hence further alleviating any potential perception of conflicts of interest.

I noted that this would remove your usual “economies of scale” arguments in favour of an acquisition, which the chairman agreed with and which the board had considered. But the explanatory notes pointed out that there would be other benefits, such as centralising head office functions.

Given Crikey correspondents’ penchant for hogging question time, the chairman called for other questions for the floor, and one gent asked one that I had marked down as well aren’t we losing a bit of goodwill in the second resolution to drop the name “Singleton” from the company’s name?

The chairman and Singo indicated that they’d agonised over this one a fair bit, but it was decided that keeping the “Singleton” name would identify the company too closely with one side of the business. It was thought that the new name, “STW Communications”, would more adequately reflect all of the businesses under the holding company.

That’s fair enough justification, but for mine this company will forever be known as the “Singo group”.

I was then given another go and asked whether the board had any targets as to how they could improve profitability in JWT.

Carnegie pointed to the Singo group’s successful business model, which had delivered margins unprecedented in their competitors here and abroad. They had the confidence in the model, which was developed after the Ogilvy & Mather merger with the Singo group, that it could be transplanted into JWT and enhance its profitability.

Singo ominously noted that Russell Tate would be the new sheriff in town at JWT. One gets the feeling that Tate is a no-nonsense sort of character and won’t suffer any chain-dragging at JWT. When I asked Singo whether any other execs would be seconded to JWT he replied that “the rest of us are all too nice”!

The chairman readily admitted that the company wasn’t getting JWT for a song and suggested that this was a key issue shareholders had to dwell on in deciding whether to approve the proposed acquisition. But he pointed to the fact that JWT hasn’t had anything near the earnings of the Singo group and re-iterated the company’s faith in transplanting their business model into JWT.

Another question from the floor was whether, in issuing shares in the Singo group to WPP, the company is setting itself up for a hostile takeover a la Arnotts a few years back, where a supposedly friendly acquisition soon turned ugly.

Carnegie acknowledged this was always a risk but again said that their profitability was outpacing that of any competitor, so they weren’t at risk of a hostile takeover so long as they kept up their performance and the “prey can swim faster than the predator”.

The other issue that Carnegie suggested that shareholders needed to overcome before approving the acquisition was whether they would be neutered by only taking 49% in JWT.

His argument in this regard was that WPP would have the same confidence in Russell Tate’s ability to extract value from JWT as the Singo group did, so they would effectively act as partners and build on their strong relationship which began with the Singo Ogilvy & Mather merger. Carnegie also emphasised the importance of being able to tap into JWT’s international client base. Russell Tate added that the Singo group wouldn’t be going into this transaction if they thought they wouldn’t be heard.

I also tried to throw in a couple of questions about 2GB whether Singo would sell his stake to the company and how negotiations with Crikey’s favourite subscriber generator, the Parrot, are going. But as soon as I dropped that single digit and two letter acronym, Singo and Carnegie chirped on cue that they don’t know what the hay is going on with 2GB so don’t ask us any questions about it!

All in good fun of course, but I would’ve loved to have got the scoop on the Parrot’s next career move.

In the end, the shareholders overwhelmingly endorsed the board’s recommendation to go ahead with the acquisition. The show of hands was unanimous and I must have heard this wrong apparently 0% of proxies were voted against the resolution. Surely there was some lone voice of dissent in the wilderness?

Perhaps this cynic was bluffed by a slick advertising campaign, but I’d have to say this looks like a goer. (As in a financial success, not the “goers” that used to appear in Singo’s ad campaigns of old.)

The main concern is that the Singo group has paid top dollar for JWT, but their confidence in their business model and their track record in recent years in implementing that model gives one considerable comfort that they will be able to enhance the JWT business.

And sadly, the name change was adopted. But as I said before, this company will forever be inextricably linked with “Singo”.

Sadder still, I exited the meeting at 10:40 without having a dip into the fabled Singo bar. I’ll have to save myself for the AGM later in the year.

Feedback to neal.woolrich@start.com.au