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Online Exclusive: Holding Company News


Advisory Firms Recommend Against Raider's Board Candidates

By Published on .

NEW YORK (AdAge.com) -- Alain de Pouzilhac, chairman-CEO of French advertising company Havas, has gained some traction in an ongoing battle with the company’s largest single shareholder, Vincent Bollore.
Vincent Bollore is seeking to have himself and three of his company's executives added to the Havas board.
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Only weeks before Havas' June 9 shareholder meeting, two independent shareholder advisory firms, Institutional Shareholder Services, headquartered in Maryland, and Paris-based Proxinvest, recommended that shareholders vote against four directors proposed by Mr. Bollore, whose company owns more than 20% of Havas' shares, for Havas’ board.

Fighting for four seats
In April, Mr. Bollore, a French industrialist and corporate raider who heads Bollore Group, nominated himself and three others to take seats on Havas' board: Marc Bebon, who would represent the interests of Bollore Medias Investissements, the entity that holds the Havas shares; Cedric de Bailliencourt, who represents Bollore Investissement; and Thierry Marraud, finance director of multiple Bollore Group entities.

While ISS called the claim of a large shareholder for board representation “legitimate,” ISS argued that in the event of a proxy contest a dissident shareholder such as Mr. Bollore should present an alternative business plan or strategy that enables shareholders to assess the impact he and the other dissident shareholders will have on the company. (A proxy contest is a technique used by an acquiring company to gain control of a takeover target by persuading shareholders to remove current management in favor of directors sympathetic to the acquirer. If successful, the acquirer avoids having to pay a premium price.)

Mr. Bollore, ISS said, hasn't done that, nor has he offered proof that his nominees are equally or more qualified than current directors and new nominees.

No examples of mismanagement
Finally, in response to Mr. Bollore’s claim that Havas was mismanaged when he began buying shares in the company last summer, ISS said that he “failed to provide specific examples with respect for mismanagement.”

Stanley Dubiel, managing director for international research at ISS, which delivered its report May 20 to its clients, which include pension funds, banks and other institutional investors, said it is not unusual for the firm to recommend shareholders vote against a board nominee.

"We do it on average 20 to 30 percent of the time outside of the U.S. in particular," he said. ISS recommendations are formed based on its policies on corporate governance, which are created from a review of academic research, the firm's 20 years experience in the field, and discussions with clients.

One week prior to Mr. Bollore’s board request, Havas said it would ask shareholders to approve the addition of three shareholders to the board, which currently has 13 members, as well as the renewal of three current directors’ terms. Havas’ bylaws state that the board can have between three and 18 directors. ISS and Proxinvest each recommended shareholders vote in favor of renewing the current directors’ terms and adding the other three to the board.

French newspaper interview
In an interview with French newspaper Le Figaro today, Mr. de Pouzilhac said Mr. Bollore has embarked on a destabilization effort over the past 10 months. He also said Mr. Bollore says different things regarding his views on Havas at different times, and found it especially troubling to learn in press reports that while Havas was bidding to buy Grey Global Group, Mr. Bollore was in discussions with Martin Sorrell, CEO of Havas rival WPP Group, which was also bidding for Grey.

Havas is the parent of advertising agencies Arnold Worldwide and Euro RSCG Worldwide, as well as media buying and planning agency MPG.

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