Bollore Pushes for More Aegis Power

Maneuvers Indicate he Could be Planning Merger, Creation of New Company

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Are we about to witness the creation of a new agency holding company? Those watching Vincent Bollore's maneuvers wouldn't bet against it.

Mr. Bollore, who already controls and runs Havas and whose conglomerate Bollore Group is Aegis' single largest stakeholder, last week inched even closer to the 30% shareholding threshold that would require him to make an offer. Additionally he made a bid to put two of his nominees on Aegis' board, a move that was rebutted so strongly by the London-based company that it may force Mr. Bollore to come out and make a public bid.

Should he bid successfully for Aegis, he could then marry Havas and Aegis, creating the third-largest media organization worldwide in terms of billings, per rankings by Recma International. In terms of overall size, the combined entity would move up only one notch to No. 5 in worldwide revenue rankings, behind Dentsu.

"Strategically, we can see why Bollore would favor a merger with Havas, primarily to enhance Havas' competitive position and underpin the value of his own investment in Havas," said Deutsche Bank research analyst Patrick Kirby. "However, this is not a necessary or desirable deal from Aegis' perspective."

While raising his holdings from 26.56% May 15 to 27.56% midweek to 28.81% on May 19, Mr. Bollore also proposed two nominees-former Cannes International Advertising Festival CEO Roger Hatchuel and Philippe Germond, an ex-executive of French telecommunications company Alcatel-to Aegis' board and requested they be voted on at the company's annual general meeting, then scheduled for May 24.

Aegis' board had been fairly quiet in its responses to Mr Bollore's public statements that he wanted representation on its board, but once he made his nominations, the board made its feelings crystal clear: "The Board ... will not support the proposed nominations," the company said in a statement. Shareholders were asked to vote against Bollore Group's proposal.

conflict of interest

Since Mr. Bollore is chairman and a significant shareholder at rival Havas and chairman of Bollore Group, which owns the Aegis stock, board representation by a nominee proposed by him would be a conflict of interest, Aegis said. "It is not possible for any director appointee proposed by Group Bollore to be deemed sufficiently independent to act in the interest of all shareholders."

The company also requested a full turnout from Aegis shareholders, and postponed the meeting until June 14 to "give shareholders the opportunity to form their own view," Aegis Chairman Colin Sharman said.

Mr. Bollore did not comment publicly on Aegis' move, but he seemed to remain unfazed, increasing his stake another 1.25% on May 19.

Aegis' second-largest shareholder, Fidelity International/FMR, with a 9.3% stake, according to a report in The Times of London, supports Aegis, but neither Fidelity nor Aegis would comment.
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