’Levy cannot derail Bozell deal,’ True North chairman proclaims

Optimism is growing this week among Publicis bosses that they can torpedo the merger between their former global partner, True North, and Bozell, turning True North into a possible take-over target.

Optimism is growing this week among Publicis bosses that they can

torpedo the merger between their former global partner, True North, and

Bozell, turning True North into a possible take-over target.



However, Bruce Mason, True North’s chairman, vowed to press on with the

deal, saying: ’Levy cannot derail this deal. The institutional

shareholders have been very supportive of it. All it needs is a simple

majority and Levy can’t alter that.’



’It’s going to be a close run thing,’ countered a source at Publicis,

whose 18.5 per cent stake in True North, the FCB holding company, makes

the French network its biggest shareholder.



Only a straight majority is needed from next month’s True North

shareholder vote for the Bozell deal to be approved. But Publicis

believes that, with some shareholders failing to vote or abstaining and

others supporting an offer by Maurice Levy, the Publicis chairman, to

buy True North for dollars 28 a share, the balance may tip in its

favour.



Analysts in New York dismiss Levy’s offer as more of ’a posturing move

than a serious offer’, but say it highlights the undervalued state of

True North’s shares, which would be attractive to an acquiring company

if a real offer were to result.



If True North was to come ’in play’, analysts say the Bates network,

anxious to bolster a weak US operation after its demerger from Cordiant,

could be a potential bidder. But Mason claimed the probable loss of

senior staff and client defections provoked by a takeover was an

effective ’poison pill’ that would ward off predators.



Mason also hit back at Levy’s claim that True North is paying too much

for Bozell, which adds no strategic value to the group.



’He hasn’t seen the details,’ Mason said. ’We and the investment houses

know this deal is right. What’s more, Bozell operates in 52 countries

with Chrysler as its biggest client.’



Some observers believe Levy might back off in favour of a deal under

which he would swap his True North shares if the company gave up its

26.5 per cent holding in Publicis Communications, which includes the

group’s European operations.



Others claim Levy is fearful his diluted shareholding in True North

after the Bozell deal will hit Publicis profits. There is also

speculation that Levy is trying to raise the value of his True North

stock to sell it before the merger is approved.



Mason said: ’Levy has discovered the perils of not having his own global

network.’ He is only in 13 countries outside Europe and I think he’s

under pressure.’



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