Dentsu’s president, Yutaka Narita, can expect especial scrutiny this July 1st, Dentsu’s centenary, when he delivers the traditional ‘State of the Nation’ speech. Analysts, rival agencies, and the media will all be looking for clues about the giant agency’s IPO, expected this autumn and which will probably value Dentsu at US$10-13 Billion.

They will watch in vain.

Insiders say that Narita does not intend to reveal the date or other details of the offer, which, according to analysts, is certain to go ahead despite uncertain market conditions.

There are good reasons to believe Dentsu’s IPO can weather market turbulence. It is one of the last, giant, privately held blue chip companies in Japan, considered well managed, financially strong, and has unchallenged dominance of Japan’s advertising market with roughly a 25% share. All factors to make the offer attractive to investors.

The offering will not enrich management, who are not significant shareholders - even Dentsu’s president holds less than 1,500 shares. But it will provide senior management with a stock option scheme for the first time. Current owners - principally two news agencies, Kyodo Tsushin (22.8%), and Jiji Press (16.3%) plus a number of charitable trusts, and financial institutions will see their holdings diluted.

When the IPO was announced three years ago, Dentsu said the funds would be invested in R&D and used to fuel international expansion.

Building momentum, Dentsu has been investing in new ventures and partnerships to boost its presence in digital media and competence in new communication technologies. Examples include Harmonic Communications, Melodies & Memories Global (a new Company Managing Digital Content Rights), and D2 (a joint venture with NTT DoCoMo to handle advertising on the mobile Internet).

Dentsu Asia Pte Ltd, has been formed in Singapore to strengthen its regional Asian business and manage a network of subsidiaries. But the growing importance of Dentsu’s own network does not diminish that of DY&R and BCOM3.

For over a decade, Dentsu executives have affirmed the need for three international networks to help them meet the needs of their vast roster of clients in Japan. At home, Dentsu happily handles competing clients in many industries. Most of Japan’s automakers, brewers, toiletry, cosmetic, soft drink, and food companies give Dentsu plum assignments. But overseas, Western concepts of account conflict prevail.

Though Dentsu’s relations with Y&R were badly ruffled in the run-up to WPP’s takeover, they have steadily improved in recent months following meetings between Sir Martin Sorrell, Yutaka Narita, and Fumio Oshima who heads Dentsu’s international operations. Dentsu officials in Tokyo dismiss as ridiculous suggestions that DY&R has no place in Dentsu’s future.

There have also been moves to bring the Dentsu and BCOM3 networks closer. The two formed PDS, a media agency, in Seoul; Beacon Communications in Tokyo; and merged Starcom with Dentsu’s media companies in Australia.

Three years of preparation for the IPO have sharpened Dentsu’s performance. For the year ending ended March 31, 2001. The agency recorded consolidated billings of Y1,814.3 billion (up 13.4%), gross profit of Y301.8 billion (up 16.2%), operating income of Y72.5 billion (+43.7%), ordinary income of Y71.8 billion (+44.7%) and net income of Y41.3 billion (+99.8%) all record highs.

Dentsu is shooting for the stars and has already hired the Russian module of the International Space Station to start filming commercials in deep space.