’No, no, no, Stefano, it is not expensive,’ an animated Alain de
Pouzilhac exclaims as we begin a telephone interview from Paris. ’Maybe
our competitors are saying it is expensive, because they are
disappointed. But if you see the calculations we have made ...’
It’s Monday afternoon, and de Pouzilhac, the chief executive of Havas,
is ready for the money question. He’s been fielding it in Paris all
That morning, Havas had ended weeks of speculation by announcing that it
was to acquire the Snyder Communications group for dollars 2.1 billion.
It is the largest purchase in advertising history.
Critics would say that at dollars 2.1 billion, Snyder is up to dollars
600 million overvalued. They argue that the group lacks a worldwide
advertising agency network, that it is a loose grouping together of
companies, and that there is little added value from the centre.
What’s more, they claim that Dan Snyder, the 34-year-old Marylander who
built the group in little more than a decade, was desperate to sell.
That since he acquired the Washington Redskins (as part of a consortium
of private individuals because NFL rules prohibit corporations owning
franchises) he had lost interest.
Not only that, according to the sceptics, the Snyder share price, which
had peaked at dollars 52 a share in April last year, was never going to
recover to its previous level. Despite restructuring the group and
splitting the stock, Snyder was finding it difficult recovering much
past dollars 20 a share. So, was this an expensive firesale?
’Today, we are very highly valued in our market, and they are not in
their market,’ de Pouzilhac says. ’If we had to pay in cash, OK, perhaps
then that would be expensive, but no-one in advertising has realised
this kind of accretive deal before.’
This is a reference to the complicated way in which Havas will acquire
Snyder in stock. Essentially it is paying dollars 29.50 a share for
Snyder in future Havas stock (Snyder was at dollars 21 a share, close of
play on Friday).
A US listing is expected once the deal clears anti-trust hurdles in the
Havas’s stock has already soared this week on a favourable response to
the deal. The French stock exchange, the Bourse, has bought de
Pouzilhac’s rationale for the move, and it must be said that Snyder
appears to fit better with Havas, with fewer conflict or ego issues than
with any of Havas’s rivals.
So it is that Arnold Communications will lead the relaunched Campus,
Havas’s second network; Brann and Circle.com will join with Euro’s
diversified services to create a real below-the-line and interactive
powerhouse; and Bounty SCA, the healthcare marketing wing (known to so
many new parents for its Bounty baby books), becomes part of Euro
’There is no conflict for the simple reason that we put the different
companies in different divisions,’ de Pouzilhac continues. ’Bounty is a
jewel; Arnold has a great creative reputation and will lead Campus, and
Brann and Circle take our diversified income from 35 per cent to
something like 50 to 60 per cent.’
De Pouzilhac is equally pleased to have tied in the senior management of
the Snyder companies, particularly the Arnold CEO, Ed Eskandarian (who
was once made rich by Robin Wight in a previous lifetime), who has
signed for three years.
Eskandarian already had plans to expand Arnold in New York. This will be
the next development down the line. In fact, the only apparent conflict
situation in the entire deal is Partners BDDH’s Mercedes and Co-op Bank
accounts, and WCRS’s BMW and First Direct clients. But, to be honest,
London is less of a factor in this particular deal than Cirencester,
home of Brann.
’We haven’t discussed the agency situation in London,’ de Pouzilhac
’They are both very successful. We will be transferring the Campus HQ
from Europe to Boston, but it is too early to speak of anything
De Pouzilhac adds that Snyder’s Bethesda, Maryland HQ will gradually
become less significant. Hardly a surprise there, but what of Dan Snyder
himself? Will he now concentrate on running his beloved Washington
Details regarding his future were noticeable for their absence from the
Havas press release.
’Dan Snyder will be out as chairman and chief executive, yes,’ de
Pouzilhac confirms. ’But as a shareholder he will be there till the end
of the year, minimum.’
While rivals are busy carping, de Pouzilhac, high on the adrenaline of
the day, can scarcely conceal his glee at pulling off his deal. ’It
changes totally the scale of the Havas Group. At this time it has been
very well received in Paris,’ he says.
And both of those statements are, unquestionably, true. Havas’s soaring
stock this week only emphasises the point. As if to underline what
doesn’t need underlining, Bob Schmetterer, the worldwide CEO of Euro
RSCG, calls later before the two men get on a plane to conduct an East
Coast roadshow explaining the deal.
’They are all fast-growing and profitable companies,’ he says. ’Look at
the fit and tell me where are the other Branns? The other Arnolds?
The justification for any perceived premium is in the assets. You know,
people who don’t make deals always think they are expensive.’