Havas set for New Year spending spree

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PARIS - France's Havas Advertising is poised for a buying spree in 2001 after the successful completion of a $615 million convertible bond issue this week.

Havas, the world's fourth-largest consolidated agency group, and parent company of the Euro RSCG Worldwide ad agency network, says proceeds from the placement will fund future growth and acquisitions in its four operating divisions as well as the planned refinancing of debt at recently-purchased U.S. subsidiary Snyder Communications.

Shares in Havas Advertising have fluctuated wildly as information on the bond float came into focus, but the share price appeared to rebound at press time Dec. 14.

The bond issue, managed in Paris by French bank Societe Generale and destined solely for non-U.S.-based investors, covers some 30 million bonds that may be converted into corresponding new shares in Havas beginning Dec. 22, or held through maturity on Jan. 1, 2006 when they will pay 117.8 percent of their nominal value.

Investors sold existing shares in Havas and subscribed to the bond float to take advantage of a 35 percent premium attached to the offer: the bonds were floated at a nominal price of $18.80, while Havas shares are currently trading around $14.

Some analysts expressed fear that new shares created by the offer could cut into earnings-per-share in the coming years, but Havas says in a statement that the bond issue will enhance the group's ability to grow both organically and externally.

Copyright December 2000, Crain Communications Inc.

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