Battle Lines Drawn Against Bollore's Aegis Board Picks

Company Cites 'Conflicts of Interest' With Its Largest Shareholder

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LONDON ( -- A battle for two board seats is shaping up between Aegis Group and its biggest shareholder, Vincent Bollore. .

Taking a hard line toward Mr. Bollore's attempt to be represented on Aegis' board, the U.K.-based media services company today said that it will vote against the two candidates, Roger Hatchuel, the former owner of the Cannes Lions International Advertising Festival, and Philippe Germond, a former executive of French telecommunication equipment maker Alcatel, as directors,

Aegis said it is rejecting the candidates because of "fundamental conflicts of interest."

Recently increased stake
Mr. Bollore is the chairman of Aegis rival Havas, and through his own Groupe Bollore he holds his recently increased 27.56% stake in Aegis. The board believes it is not possible for any director appointee proposed by Groupe Bollore to be sufficiently independent to act in the interest of all Aegis shareholders. Also, the board is focused on delivering full value for all Aegis shareholders and will not favor any shareholder group above others or all shareholders as a whole.

Aegis directors called for a full shareholder turnout at the company's annual general meeting to give them a better chance of victory against Mr. Bollore. The board also postponed the meeting by three weeks to June 14 to give extra time for shareholders to consider Mr. Bollore's resolutions.

Aegis' board held a special meeting today to consider the two candidates. Mr. Bollore's nominations were made yesterday afternoon, only hours before the passing of the seven-day deadline for submitting a resolution for inclusion at the annual shareholder meeting. The meeting was originally scheduled for May 24.

Carat's Verklin up for re-election
Five directors are up for re-election on the 11-member board, including Carat North America CEO David Verklin. (Carat is a unit of Aegis.) Aegis does not limit the number of directors on its board, and to get on the board, a majority of votes from current directors is required.

If Mr. Bollore's Aegis holdings nudge up to 30%, he is obliged by U.K. rules to make a takeover bid for the company.

Analysts aren't giving Mr. Bollore's picks much of a shot. Deutsche Bank analysts in London said today that "it [is] unlikely that the Bollore nominations will be successful. The circumstances around this forthcoming [meeting] are very different to those of the Havas [meeting last year, where Mr. Bollore ousted the chief executive and took control of the company] which was effectively a vote of no confidence in Havas' management."

Deutsche Bank believes that if Mr. Bollore wants to take control of Aegis, he will have to make an offer for the company, and that a merger between Havas and Aegis is "not necessarily desirable from Aegis' perspective."

Latest development
The latest developments in the saga indicate that Mr. Bollore has a serious long-term game plan for Aegis Group, possibly involving creating closer links between Aegis' media networks, Carat and Vizeum, and Havas' media buying-and-planning unit, MPG.

This could also pave the way for a sale of Synovate, Aegis' market-research arm, which has consistently interested WPP Group Chief Executive Martin Sorrell. Mr. Sorrell and Mr. Bollore are believed to be on good terms, and Mr. Bollore has recently restated that he would like to do something "in our mutual interest." Calls to WPP and Mr. Sorrell were not returned at press time.

Starting on May 25, WPP Group will be free to make a bid for Aegis. Mr. Sorrell considered a proposal for buying Aegis Group in conjunction with private equity firm Hellman & Friedman last fall, but when a solid offer did not materialize by Oct. 28, 2005, WPP was precluded from making another offer until May 28, 2006.
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