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.’
