De Pouzilhac could face calls to step down from Havas

by Jennifer Whitehead,, Brand Republic 14-Sep-04, 12:00

LONDON - Alain de Pouzilhac, chairman and chief executive of Havas, could face calls to step down when the group reports its interim results this week, after the failure of its bid to take over Grey Global Group.

According to reports, De Pouzilhac is expected to face calls for his resignation after making the bid for Grey against the wishes of major stock holder Vincent Bollore and without the support of its bank, Societe Generale.

The Havas chief yesterday defended his bid for Grey, saying that "when an opportunity like Grey comes to the market, it is our duty to assess whether it can significantly add value to our group... that resulted in a competitive bid proposal".

However, as the bids started to rise De Pouzilhac said that the price required by Grey would not allow Havas to generate sufficient added value for shareholders.

"As a result, we did not increase our offer, so as to remain totally focused on the objectives I set our teams over a year ago: to relaunch our group to rapidly reach the same growth and operating margin levels as the market leaders," he said.

In the end, WPP won the battle for Grey, after making an offer of $1,005 a share for the group, valuing it at $1.52bn (£844m). The failure of Havas to win the fight leaves it looking vulnerable to a takeover bid itself.

A bid for Grey was seen as the last chance for Havas to gain critical mass and complete with the major players of the advertising business. It had already lost out three years ago when it saw Tempus go to WPP. With Grey gone, there are no targets left for it to acquire and substantially grow.

Grey would have given Havas control of MediaCom. This could then have been combined with its own media plannning and buying business MPG, which is weak in the US.

Shares in Havas, traded on the Paris Bourse, rose by 10% yesterday -- partly a reflection of the relief of investors that the company had failed in its bid for Grey and also as speculation that it could be taken over itself intensified. Today, its share price fell back by almost 0.5% to €4.25.

De Pouzilhac has overseen a massive reorganisation at the group over the past year, which has seen jobs cut and the closure or sale of underperforming assets, with the aim of improving profit margins and bringing growth in line with other ad groups.

WPP and Publicis are being mooted as likely bidders for Havas. The company will report its interim results this Thursday.

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