That was the question ad industry execs were asking late last Friday, after the abrupt departure of the company's CEO, Robert Lerwill, prompted a surge in trading of its shares on the London Stock Exchange.
Mr. Lerwill, whose exit leaves Chairman John Napier in temporary charge of the company, was a vocal opponent of attempts by Havas chairman Vincent Bollore to gain seats on the company's board of directors, and is seen by some as having been an obstacle to the sale of the media buying and market research group.
Trading volumes rise
Following the announcement of Mr. Lerwill's departure on Thanksgiving Day, Aegis stock jumped 19% to 59 pence on London's Stock Exchange and a total of 30,115,604 shares were traded, several times the usual volume in the stock. On Friday Nov. 28, Aegis shares rose further, to 63 pence, although the company is still trading well below its 52-week high of 133 pence.
The renewed interest in Aegis is likely based on the theory that Mr. Bollore may now move to expand his interest in the company. As Aegis's largest shareholder, Mr. Bollore has already made five unsuccessful attempts to win two seats on the company's board of directors for Bollore representatives. He was opposed by Mr. Lerwill on the grounds that his role as chairman of Havas, whose media agency MPG competes with Aegis's Carat, posed a conflict of interest. Mr. Bollore currently owns 32.9% of Havas and a 29.9% stake in Aegis, just under the 30% holding that would require him to make a bid for Aegis under U.K. laws.
What will Bollore do?
Mr. Bollore has expressed interest in several different scenarios, ranging from MPG and Aegis Media working together to a full takeover of Aegis. At one time, it seemed likely that Mr. Bollore, after buying the company, would sell off Aegis's market research business, Synovate, to WPP Group Chief Executive Martin Sorrell. However, that now seems less likely given that Mr. Sorrell has just made a $2 billion acquisition of research giant Taylor Nelson Sofres. One Havas executive also speculated that Mr. Bollore might not strike right now, instead waiting for the stock price to dip again.
The U.K. press speculated that Mr. Lerwill, CEO of Aegis since 2005, was ousted following boardroom disagreements. The company said in a statement that Mr. Napier, who became chairman of Aegis in July 2008, will take over Mr. Lerwill's duties on an interim basis. In the statement, Mr. Napier said: "The strength of Aegis is the performance of its two large international businesses: Aegis Media and Synovate. They are both well-managed and we expect their combined 2008 operating results to be broadly in line with the average of current market expectations."
Aegis and Mr. Lerwill could not be reached for comment. Havas declined to comment.
Mr. Lerwill's unexpected departure comes near the end of a year of management turmoil for the company. Mainardo de Nardis, CEO of Aegis Media, left suddenly in May, a month after the exit of David Verklin, CEO of Aegis Media Americas, was announced. (Mr. de Nardis was named CEO of OMD Worldwide last month and starts his new job in early 2009).
On Friday Aegis Group announced solid half-year results, with revenue climbing 21.8% (8.2% organically) to 608 million pounds (about $930 million at current exchange rates), and underlying profit up 16.7% to 65 million pounds ($99 million). But it's been a tough business year for operating unit Carat, which undertook a major U.S. restructuring in the wake of losing major accounts like Hyundai and New Line Cinema. Carat also recently lost the $1 billion consolidated Renault-Nissan media account for the Europe, Middle East and Africa region to Omnicom Group's OMD after an 8-year relationship with the marketer.