Stalemate With Aegis Persists, but Bollore Vows to Keep Fighting

Financier Fails Again to Gain Seats on Board; Holding Company Stands by Its Conflict-of-Interest Argument

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LONDON ( -- In the standoff between Aegis Group and its biggest shareholder, French financier Vincent Bollore insists he will never give up.
Aegis Group CEO Robert Lerwill: 'We are as big, if not bigger, than most people.'
Aegis Group CEO Robert Lerwill: 'We are as big, if not bigger, than most people.'

Mr. Bollore is chairman of Aegis rival Havas, chairman of Havas' media arm, MPG France, and chairman of Groupe Bollore. He owns 29% of Aegis, and is demanding the Aegis board add two of his representatives.

Aegis sees that as a conflict of interest with Havas, and shareholders who aren't Mr. Bollore agree. Three separate votes in the last 10 months -- one at the annual meeting and two at special meetings called by Mr. Bollore -- have been landslides against his candidates.

War of attrition
Mr. Bollore's tactic in a career as a successful corporate raider has always been to wear down the opposition.

"I will do this three times a year until my retirement, then my successor will win," he said.

With that level of determination, he may even be encouraged that at the latest gathering last week, only 93% of non-Bollore votes were cast against his nominees on the third vote, compared with 94% on the first and second votes.

In fact, Mr. Bollore does the math a little differently. His overall support, counting Bollore-owned shares, has risen to 43.7% from 41.5% in the previous vote.

Aegis Group CEO Robert Lerwill is similarly dogged. "It's a useful way for [Groupe Bollore] to remind people they are a significant shareholder and player in the arena," he said. "But this isn't an election. They don't go around telling their story and suddenly voters say, 'Oh we got it wrong,' and change their minds."

'Not on speaking terms'
At last week's 12-minute meeting, Mr. Bollore scorned the small amount of time Aegis spared him. "It shows lack of communication for a communications group, and it's not good that we are not on speaking terms."

Mr. Bollore's definition of "not on speaking terms" is loose. "We talk," he conceded, "but they don't ask questions. There is no debate or exchange of views."

He believes the board "needs fresh blood." His two candidates, both French, are Roger Hatchuel, the retired former owner of the Cannes Lions International Advertising Festival, and Philippe Germond, a telecom executive little-known outside France.

At least one high-level industry exec, who asked not to be named, is on Mr. Bollore's side. The executive said: "He'll do it eventually. His problem is in the choice of candidates. He should have gone for people who Aegis shareholders would actively want on their board."

Significance, future hazy
It's unclear what, if anything, the struggle means for Aegis' future. Bid speculation flares periodically. Publicis Groupe, a perennial candidate, issued a statement in January dismissing rumors about an offer for Aegis as "groundless." And WPP Group's interest lies mainly in Aegis research arm Synovate.

Mr. Bollore himself is believed to want to combine Havas' MPG media holdings with Aegis in some form.

Mr. Lerwill has had enough of speculation about Aegis' future. "It's a worn-out record," he said. "People have been asking what will happen to Aegis ever since it began. We are as big, if not bigger, than most people. We are able to give results to our clients."

Ups and downs
Aegis is doing well, reporting last month a 16% increase in 2006 pretax profit to $232 million and last week retaining Philips' global media account after a five-month review. Digital unit Isobar, already the source of 20% of Aegis Media's revenue, up from 15% a year ago, is a star performer and could be particularly interesting for Mr. Bollore.

But Aegis has lost business in the U.S., including the briefly won Wal-Mart Stores business that went back into play almost immediately after Wal-Mart dismissed the executive in charge of the review, Julie Roehm. When Pfizer sold its over-the-counter business to Johnson & Johnson, Aegis lost another chunk of business. And, Mr. Lerwill said, "Hyundai cut their spend and put it into digital, a trend that we benefit from elsewhere in the world."
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