Delaware court stops Publicis from blocking TN

Published on .

By Ira Teinowitz

A Delaware Supreme Court panel on Dec. 29 killed a last-ditch effort by Publicis Communication to block a Dec. 30 True North Communications stockholder meeting, appearing to make True North's acquisition of Bozell, Jacobs, Kenyon & Eckhardt a near certainty.

It was not immediately clear if Publicis President Maurice Levy would still attend True North's stockholder meeting in Chicago.

A Delaware Chancery Court on Dec. 23 issued a temporary injunction barring Publicis from launching a tender offer for True North, and in a subsequent telephone hearing Chancellor William Chandler III indicated his order would bar Mr. Levy from speaking out against the merger at the meeting, though Publicis could vote its shares against the deal.

In an hourlong telephone hearing on Dec. 29 before a three-judge panel of the Delaware Supreme Court, Publicis sought to either overturn Judge Chandler's decision or delay the stockholder meeting. Three hours later, the state Supreme Court panel rejected Publicis request in a two-page decision and upheld the lower court decision.

Publicis, which was left with 18.5% of True North stock after its combination with True North fell through, has been trying to prevent True North from acquiring Bozell.

Judge Chandler had ruled that while Publicis could vote its own shares against the acquisition, Publicis had agreed to otherwise support True North's planned acquisition in the negotiations that led to the unwinding of the planned combination.

In testimony on Dec. 22, Mr. Levy had argued that he had agreed only to provide required accounting information if True North sought to acquire another agency, while True North argued that Publicis had agreed to support acquisition of other agencies.

True North's acquisition of BJK&E will take effect Dec. 31 if stockholders approve.

Copyright December 1997, Crain Communications Inc.

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