Bollore Doubts His Nominees Will Win Seats on Aegis Board

Havas Chairman Told Shareholders He Won't Give Up If Defeated

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PARIS ( -- Although Havas Chairman Vincent Bollore expects his demand for two seats on Aegis Group's board of directors to be defeated at Aegis' annual general meeting June 14, he's not giving up.

"We haven't got many illusions about what's going to happen at the [Aegis] meeting," Mr. Bollore told Havas shareholders at their annual general meeting today in Paris. As Aegis' largest shareholder, with a 29% stake in the company, Mr. Bollore indicated that if his nominees are turned down, he would lobby Aegis' other shareholders and even seek to have another Aegis meeting called. English law allows a shareholder who owns more than 5% of a company to ask for an extraordinary general meeting, he said.

"We're just asking for a small number of representatives -- two out of 13 [board members] is not much, and it won't be any of us [from Havas]," he said.

Conflict of interest?
Mr. Bollore last month nominated two Frenchmen, Roger Hatchuel, the former owner of the Cannes Lions International Advertising Festival, and Philippe Germond, a former telecommunications executive, for seats on the Aegis board. Aegis has been rallying its shareholders to vote against the two men, alleging a conflict of interest in Havas' having representatives on the board of a competitor.

Last week the U.K.'s National Association of Pension Funds warned through its voting advisory service that "a divided board is not conducive to shareholders' interests." The group said Mr. Bollore's representatives have a "conflict of interest, given that he has significant interests in a competitor."

"When people say there's a conflict of interest between Aegis and [Havas media arm] MPG, that's wrong," Mr. Bollore said.

"We have no comment in any way on the votes," said an Aegis spokeswoman in London today. "We will issue formal results after the AGM on Wednesday."

A new regime
Mr. Bollore opened the Havas meeting with a few jokes, contrasting his year-old regime with that of former Havas Chairman Alain de Pouzilhac, whose departure Mr. Bollore engineered last year after winning four seats on the Havas board for his representatives.

At Havas' shareholders meeting last year, held at a chic venue rented for the occasion, cost more than $2 million, Mr. Bollore said. Today's meeting, which started at the unfashionable hour of 8 a.m., saved shareholders' money by taking place in the staff cafeteria at Havas' headquarters in a Paris suburb. The meeting had to be over by 11:30 so the chairs could be rearranged and lunch dished up for employees.

In the spirit of saving shareholders money, Mr. Bollore said no gifts would be given out at the meeting (although no one remembered getting lavish gifts in previous years). After a staffer corrected him, he said there would be a small gift (everyone got an alarm clock). About 150 shareholders, analysts and a few journalists attended the two-hour meeting.

Who's to blame
After an introduction by Mr. Bollore, Havas' CEO, Fernando Rodes, put the blame for Havas' decline since 2000 from the fourth-largest global ad group to No. 6 squarely on past management and bad acquisitions "that seemed to have been done by our worst enemy." Speaking in French, Mr. Rodes, a Spaniard, said, "They bought 200 companies in 55 deals that cost more than $4 billion. That's 8% of revenue. And the share price is down 78%."

Havas executives went over the company's finances, including a 2% drop in 2005 revenue, and Mr. Bollore said he hoped for a stable 2006, with "perhaps slight improvement."

Sketchy strategy
Shareholders expecting an in-depth discussion of Havas' strategy were disappointed. One shareholder complained that Mr. Rodes hadn't really explained his strategy for Havas, and that the shareholder couldn't see the slides displayed and didn't have any written materials. Mr. Bollore, who answered most of the questions from shareholders, merely said the slides will be available on the company's website.

In other business, several of the 32 resolutions voted on at the meeting included attempts to deny compensation to several of the former Havas executives ousted last year. Another vote was to give Jacques Seguela, a creative legend and founder of the Euro RSCG agency who is now at the Havas holding company, a bonus of more than $1 million. Those resolutions passed.

Referring to possible legal action involving former Havas executives, Mr. Bollore said, "Those who have left the group, thinking that they could get the jackpot, are wrong. I will let justice decide, but for the time being, I will not take the risk to give so big an amount of money to people who left the company."

Mr. Rodes said in a brief interview with Advertising Age after the meeting that even if the Aegis deal doesn't happen, the growth of MPG, which accounts for 20% of Havas' revenue, will continue. "It will help us if we have a partner like Aegis, but if it doesn't happen, it's not the end of the world," he said.

Looking long term
Mr. Bollore said his own company, Bollore Group, has been around a long time and "we are used to working long-term. Our investment in Aegis is long-term. MPG doesn't suffer for its size; it's winning big clients every day. But it would go faster if it were bigger."

Perceptions of Mr. Bollore, who was widely viewed as a corporate raider when he began buying into Havas several years ago, have been subtly shifting to a belief that he really is in the media and communications business for the long haul. He's clearly already looking past the Aegis board meeting June 14 and a likely setback there with his board nominees.

"We will come back," said Mr. Bollore, who is 54. "I'm here until 2022. I have the time to go to a certain number of Aegis meetings."
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