Publicis withdraws from battle for Aegis as Bollore swells stake

by Gordon MacMillan, Brand Republic 17-Oct-05, 08:50

LONDON - Publicis Groupe has pulled out of the battle for Aegis and will not make an offer, as French financier and Havas chairman Vincent Bollore increased his stake in Aegis to 17.38%.

On Friday, Maurice Levy, chief executive of Publicis, indicated that pulling out of the race to buy the British media buying and research firm was an option.

Levy was said to be concerned that its £1.56bn bid would increase the French ad group's debt and hinder moves to secure an investment grade debt rating from credit agencies.

The strong position of French corporate raider Bollore was believed to be another factor. Bollore now has enough shares to block any efforts to delist Aegis from the stock exchange and break it up.

In a statement issued this morning, Publicis said: "Publicis Groupe announces that it has decided that it is not in the best interests of its shareholders to make an offer for Aegis Group."

In an interview this morning in French daily La Tribune, Levy said that the issue was the price being pushed up beyond 140p and he ruled out any counterbid if a higher offer were made.

"Aegis is a very nice company. It was an acquisition that was an attractive way to strengthen us, but not indispensable for our future. Neither today nor tomorrow would we pay above 140p. If tomorrow there were a bid at 150p, we would not make a counterbid," said Levy.

Its exit from the battle to win control of Aegis, which owns media buying networks Carat and Vizeum, leaves Bollore and WPP Group, which is working in partnership with private equity firm Hellmann & Friedman, to fight it out.

WPP's interest was understood to be solely in the Aegis-owned market research network Synovate and this morning, in a statement of its own, it confirmed this to be true.

"Following recent press comment, WPP Group confirms that it is in discussions with a private equity partner to explore the feasibility of a cash offer for Aegis Group. WPP's primary interest is in Synovate, the market research business of Aegis. There can be no assurance any offer will be made," WPP said.

If WPP and Hellmann & Friedman were successful, the San Francisco-based private equity firm would take control of the rest of the media buying group, including its digital arm Isobar.

How WPP will now proceed is unclear, but the statement does indicate that it and its private equity partner are not put off by Bollore and his rapidly growing holding.

At the end of last week as the Aegis board met in Chicago, it emerged that they, led by chief executive Robert Lerwill, would prefer to see the business sold rather than partner with Havas, which was one of the options mooted.

On Friday, Bollore took his take to 15.3% and he has now added to that, taking control of another 22m of Aegis shares, which gives him control of 17.38% and considerable say over the eventual outcome of any Aegis bid.

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