Vincent Bollore's Aegis Board Seats Bid Shot Down

Havas Chairman Vows to Continue Battle

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LONDON ( -- Though Vincent Bollore was defeated in his attempt to gain representation on the board of Aegis Group this morning when 58% of votes cast at the company's annual general meeting were against him, he ignited a potential war with Aegis by warning that he will not give up the fight.
Vincent Bollore
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Aegis shareholders reacted immediately. Institutional investor BNP Paribas said in a statement issued after the meeting: "The blackmail strategy of Bollore did not pay! This morning he threatened the other shareholders that a declared war between him and Aegis board could have a negative impact on operations."

High proportion voted
Factoring out Mr. Bollore's own votes as Aegis' biggest shareholder (he has a 29% stake in the company), 94% of votes were against his resolutions. A total of 76% of eligible votes were cast, a very high proportion by today's standards.

Mr. Bollore opened the meeting with an appeal to fellow shareholders, protesting the group's opposition to his two proposed board candidates and making it clear that he will not give up his fight. Mr. Bollore threatened a prolonged period of conflict with the board, which he warned will not be healthy for the U.K. media group.

Robert Lerwill, Aegis Group CEO, responded by stating that "the board takes a different view founded purely on conflict of interest. There is a fundamental and irreconcilable conflict of interest."

In addition to the shares he owns in Aegis Group, Mr. Bollore is chairman and a major shareholder in French advertising group Havas.

Did not expect victory
Speaking after the meeting ended, Mr. Bollore indicated that he had not expected to win today's vote, in which he proposed to get two French businessmen, Roger Hatchuel and Philippe Germond, appointed to the Aegis board. Mr. Hatchuel is the former owner of the Cannes Lions International Advertising Festival.

But Mr. Bollore left no doubt that he will use his right, as a shareholder owning a stake of more than 10%, to call for an extraordinary general meeting this fall, once he has had time to go on a charm offensive to win over other shareholders.

"I will not be rude and convene a new assembly before September," he said, but he did make it very clear that he will not give up the fight for representation.

Mr. Bollore said, "Aegis is 7%–8% of [Group Bollore] assets. It is a strategic investment and we are here for a long time. We ask only two out of 30 seats and to ensure there is no conflict of interest we have chosen two independent people who are not paid by us. We believe it is normal to be represented -- we understand the conflict issue but we just want to be fair."

What Mr. Bollore did not explain is why, if Mr. Hatchuel and Mr. Germond are completely independent, he is so keen to get them on the board. He would only say they would help the company. "These two guys' expertise and advice will create value for shareholders. The only target is to increase value."

Risking destabilization
However, Mr Bollore is prepared to risk destabilization of the company to achieve his ends. Already, as he himself pointed out, "If our representatives are finally agreed, the board will still have a problem because they recommended that they vote against."

He equated the situation with events at Havas Group last year. "It is the same problem as Havas," he said. "The board said no but the general assembly said it was unfair and the board was defeated." He said that this time around, Group Bollore is not looking for control of the company: "We just want minority and fair representation."

The outcome was very different a year ago, when Mr. Bollore outmaneuvered Havas Chairman-CEO Alain de Pouzilhac at Havas' annual general meeting, winning four board seats. Mr. de Pouzilhac quickly left Havas and Mr. Bollore took over as chairman. In the Havas case, unlike the Aegis situation, Mr. Bollore had enlisted solid support both from within Havas' management and among its shareholders. Also, Mr. Bollore did not own a major stake in a Havas rival.

As Mr. Bollore and Aegis Chairman Colin Sharman discussed voting technicalities, relations between the two men seemed cordial. "Lord Sharman is a very good chairman and a delightful person," Mr. Bollore said, while Mr. Sharman said politely, "We have a difference of opinion over a single issue. We value all our shareholders."

'Like asking Sorrell onto the board'
Behind closed doors, however, the Aegis board is said to be furious with Mr. Bollore. One insider said, "He is perfectly entitled to call a [general meeting] but what's the point? He has been roundly defeated and he is not going to change the board's mind. This is a fundamental issue of principle. How could the board comfortably discuss acquisitions, new business, new recruits or international expansion knowing that it was all going to be leaked back to a competitor? It's like asking Sir Martin Sorrell onto the board."

In the first quarter of 2006, total revenues at Aegis Media grew by 14%, and organic growth, excluding currency fluctuations and acquisitions, grew by 5%. Net new business won in the first quarter amounted to $655 million, up $230 million from the first quarter of 2005.

In the statement from BNP Paribas, the Aegis investor predicted that Mr. Bollore will continue to put pressure on the board in the short term, and in the medium term there is a high probability that he will end up bidding for Aegis to take control. BNP concluded: "While we do not expect a transaction before this autumn, Aegis speculative appeal is strong. All that has happened in the last month around the AGM more than confirms our view."
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