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As the battle between Publicis SA and True North Communications reaches fever pitch, the French company is expected to file additional details with the U.S. Securities & Exchange Commission by Dec. 10 on its proposal to acquire True North -- specifically on how it intends to structure the transaction.

Publicis' maneuvers have jeopardized True North's agreement to acquire Bozell, Jacobs, Kenyon & Eckhardt, as well as True North's own independence. Publicis is lobbying shareholders and analysts to support a tender offer for its former partner, possibly putting True North in play.

A U.S. District judge in Chicago probably will rule this week on whether to grant Publicis an injunction to stop a Dec. 30 vote by shareholders on the BJK&E deal. But regardless of that decision, Publicis Chairman Maurice Levy is vowing to press on by further soliciting shareholders to vote against the proposal and support his proposed acquisition and merger with True North.

Mr. Levy was in New York late last week meeting with advisers and pressing his case with major institutional shareholders.


True North may find this direct appeal to its shareholders hard to fight off, observers believe. Some speculate Mr. Levy's move sets the stage for another holding company to step in as its partner in an elaborate takeover gambit.

London-based WPP Group had been rumored as a possible ally in such a move, but both Mr. Levy and WPP Chief Executive Martin Sorrell dismissed the talk.

"I have never discussed a joint takeover with anyone," said Mr. Levy.

In a letter to shareholders, True North Chairman-CEO Bruce Mason said the board would "carefully consider Publicis' offer" and would report its recommendations within 10 business days.

Publicis' tender offer, worth $270 million, includes an offer for 9.62 million shares -- 32.6% of True North -- priced at $28 per share, giving Publicis a 51% majority. After the acquisition, Publicis shareholders would trade their shares for stock in a combined True North/Publicis, in effect a reverse takeover.

The offer also insists True North cancel the BJK&E deal, and urges True North to entertain other takeover bids as well.

Whether other bidders would surface is open to question. As of last week, other holding companies sat on the sidelines, mindful the BJK&E deal has a Dec. 31 deadline. A top executive at a rival holding company doubted True North was even worth $28 per share, but he and others did not rule out stepping in after Dec. 31 if the BJK&E deal goes down, taking True North's share price down with it.

One executive close to True North called Publicis' latest offer a "devilish" maneuver in that it uses the shareholders to pressure the True North board. By making a tender offer to shareholders, he said, Mr. Levy is trying to get around a "poison pill" defense that forces raiders to deal with the board by diluting the holdings of major shareholders who launch a hostile takeover.


The tender offer formalizes a Nov. 10 letter from Mr. Levy, wherein he proposed a merger with True North providing it called off the BJK&E deal. When the proposal was rejected, Publicis sued and True North countersued, claiming the merger proposal was just a ploy to stop that deal.

True North executives claim the move not only is a tactic to kill the BJK&E deal but to depress True North's share price.

Mr. Levy maintains all he wants is a fair hearing by the True North board and that he is still looking for a friendly solution.

"What I'm trying to do is tell this board, 'This company is not yours. You have to take into account what the stockholders have to say. If you don't, I will talk to them directly,' " Mr. Levy said.

The shareholders may be listening, according to market observers.

"No shareholders are going to vote for the Bozell deal now that a tender offer is on the table. They will have to find a white knight or work something out," said an investment manager who holds True North shares.

True North stock has been rising from around $23 per share since Publicis began making public overtures; on Dec. 4, when Publicis made its official offer, the shares rose $1.1875 to close at $26.3125.


Even if Publicis does prevail, the final offer will likely be higher than $28, said observers, calling a price in the low to mid-$30's realistic.

The agreement between True North and BJK&E has to close by Dec. 31 or either side can walk away. BJK&E executives would not comment, but privately officials said they expect the maneuvering means the deal will be delayed but not derailed.

John Wren, Omnicom Group president-CEO, said he has no plans to go back to the negotiating table with BJK&E, which his company pursued earlier this year at the urging of client Chrysler Corp. But he did not rule out talks if the True North acquisition deal falls through.

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