Bollore in at Havas; now what?

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What is not clear: Whether Alain de Pouzilhac has a long-term future as chairman-CEO of Havas. What is clear: He was smoothly outmaneuvered by a shrewd gamesman last week, as Vincent Bollore won four seats on the company's board.

Mr. Bollore declared that he was not intending to break up the holding company and is neither "Darth Vader nor the Big Bad Wolf." But the corporate raider-Havas' largest single shareholder with just over 20% of its shares-must have seemed like the evil emperor to Mr. de Pouzilhac, as it emerged in a tense shareholder meeting that his efforts to keep Mr. Bollore off the board had failed.

Bollore won the day by garnering the support of key insiders such as Fernando Rodes Vila, CEO of the agency's MPG and a Havas board member, as well as lining up other significant shareholders like Sebastian Holdings and AXA. He even alluded to cordial relationships with the chief executives of Havas' top clients.

Mr. Bollore's victory-all four of his executives nominated to Havas' 18-member board were approved-was followed by a coup de grace for Havas management. Sebastian Holdings, Havas' second-largest shareholder with just over 4% of shares, considered by Havas top brass to be a supporter, announced a two-year deal with Bollore Group that effectively increases Mr. Bollore's control to nearly 25%.

ALLY IN BEBEAR

"We have been betrayed by someone who was supposed to help us," said Mr. de Pouzilhac in an internal memo sent out late last week.

Mr. Bollore also found an ally in Claude Bebear, vice chairman of AXA, which owns less than 1% of Havas, and is a good friend of Mr. Bollore's. One person close to Mr. Bollore said that it was Mr. Bebear who initially encouraged Mr. Bollore to investigate Havas as a potential investment last year.

Mr. Rodes Vila, whose family owns 2.6% of Havas, said he voted for Bollore but not for the other three Bollore board nominees. Uncertainty over Mr. Bollore's interest in Havas has created difficulties at Havas-owned companies like MPG, which was unable to pursue its long-sought search for a joint-venture partner.

At the same time his grip on Havas was tightening, Mr. Bollore publicly addressed concerns that he might break up the company. During last week's emotional meeting, where Havas employees greeted attendees holding posters saying, "Don't touch my Havas," Mr. Bollore responded to a shareholder's question about his intentions saying, "I am here as president of the Bollore Group. Our objective is to invest in firms we consider attractive."

At last week's meeting, Mr. Bollore pledged that "now we are all going to work together." Many analysts and Havas watchers agree that what Havas needs is to continue a turnaround begun several years ago by Mr. de Pouzilhac.

Despite speculation that Mr. de Pouzilhac will leave after his defeat, he declared in the internal memo the next day, "I feel neither personally beaten nor dejected, just sad. ... I now intend to assume fully my responsibilities. ... You can rely on me."

Mr. de Pouzilhac after the shareholder meeting said he would "bear the consequences" of the election results. "Alain will work more closely now with Bollore," said the Havas insider, noting that Mr. Bollore's four seats give him greater ability to exert influence over Havas, but not control of the company. "This is an interim play" for Mr. Bollore, he suggested. But given Mr. Bollore's reputation as a corporate raider, Havas could be headed for a breakup.

Many in Havas' top-tier support Mr. de Pouzilhac, according to Jacques Seguela, the Havas director and chief creative officer who received the highest percentage of shareholder votes. "Everybody in the company wants him to stay," he said.

Others in the industry, however, regard Mr. de Pouzilhac as the architect of his own demise, and fault him for attempting to keep his largest shareholder off the board of a publicly traded company. Said one industry executive, "He's alone in a corner now. He lost the battle he started himself."

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