HAVAS TO MAKE BID FOR GREY GLOBAL

Board Approves Recommendation by Executive Committee

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NEW YORK (AdAge.com) -- French advertising company Havas is expected to put in a bid proposal to buy Grey Global Group following a recommendation by its executive committee, according to people familiar with the situation.

Bankers' deadline
Havas announced less than half an hour

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past a 3 p.m. deadline set by Grey Global's bankers at Goldman Sachs & Co. and J.P. Morgan Chase that its board had approved the recommendation to submit a bid.

Bids are not expected to substantially exceed Grey's market capitalization, which currently is $1.3 billion, a slight increase from its $1.2 billion market cap in late June, when it was put up for sale.

Havas, parent to ad networks Euro RSCG Worldwide and Arnold Worldwide and media-buying agency MPG, has been struggling in the past 24 months with a restructuring that involves selling off underperforming units, reorganizing its existing operations and restructuring its debt.

Secured financing
Last week, the debt-burdened company secured financing for the deal from Deutsche Bank and Societe Generale.

But Vincent Bollore, a French financier who owns more than 5% of Havas, reportedly is opposed to Havas' bid. A call to Mr. Bollore was not answered at press time.

Potential suitors
Grey Global, whose clients include Procter & Gamble Co., Mars and BAT, went on the sales block in late June. Other potential bidders include holding company WPP Group and private equity firms Hellman & Friedman, San Francisco, in partnership with Kohlberg Kravis & Roberts, New York. Grey Global is the parent of Grey Worldwide and media buying and planning agency MediaCom.

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