Bollore Group Seeks a Controlling Stake in Havas

Raises New Questions About an Eventual Sale for Havas

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Credit: Yannick Bollore
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Investment company Bolloré Group put forth an offer on Friday to acquire control of the French advertising holding company Havas.

"The Bolloré Group has been a historical shareholder of Havas for more than 10 years," Havas Chairman-Global CEO Yannick Bolloré said in a statement. "It currently holds 36.2 % of Havas' shares. This offer is a step further in the ongoing relationship already existing between the two groups. By strengthening its capital position through this public offer, the Bolloré Group underlines its will to pursue its long-term commitment to Havas."

Increasing the stake in Havas "will raise some questions about whether Bolloré's end-game is to sell Havas to a third party," Ian Whittaker, an analyst at Liberum Capital, wrote in a note. "Vivendi will also inevitably get linked, especially given its financial firepower post-disposals."

Bolloré Group's offer took the form of a proposed share swap, where miniority shareholders in Havas will get nine Bolloré Group shares, adjusted for a stock split, for every five Havas shares they hold. The offer gives a 19.5% to Havas's stock and values the advertising company at 2.8 billion euros ($3.6 billion).

The move follows an agency and network rebranding that began in 2012 and a more recent leadership shift making Mr. Bolloré chairman of Havas in August 2013, succeeding his father Vincent Bolloré, and global CEO in January.

The elder Mr. Bolloré is chairman-CEO of Bolloré Group.

Vivendi-Havas Speculation
With Havas' leadership changes came widespread speculation that the company, No. 6 in the ranking of global agency companies by revenue, would be sold or become part of French media and entertainment group Vivendi, where the elder Mr. Bolloré is chairman. Vivendi, which owns France's biggest television group, Canal +, has been divesting itself of telecom interests to focus more on its media and entertainment businesses.

But Yannick Bolloré this March dismissed the scenario in a conference call to discuss financial results for 2013. "Today there is no discussion between Vivendi and Havas about a possible merger," he said then. "Not at all."

He presented a few other scenarios on that call: "We could continue on our own, adapt our group and make some acquisitions," he said. "We could combine with competitors, as we see with Publicis and Omnicom, but I don't see that would drive clear benefits for us or our clients." (The planned merger between agency holding company giants Publicis Groupe and Omnicom Group that he mentioned collapsed earlier this year.)

Rebrand and reorg
Havas in September 2012 rebranded Euro RSCG Worldwide as Havas Worldwide. And in January 2013, it rebranded its media agencies under the banner Havas Media Group. The company changed the name of MPG, a media-agency network, and Media Contacts, a digital-agency network, to Havas Media. The changes resulted in a media group consisting of two media-agency networks: Havas Media and Arena Media.

Havas now consists of two key umbrella groups: the media group and Havas Creative Group, which includes the Havas Worldwide network, Arnold Worldwide and all other communications agencies.

Havas touted worldwide revenue of $2.35 billion in 2013, according to the Ad Age DataCenter. It reported 1% organic revenue growth from the year prior when it announced its 2013 results in February, later releasing a few more figures including a small increase in profit to $170 million for 2013, up from $162 million a year earlier.

Contributing: Laurel Wentz

With reporting from Bloomberg News

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