Speculation that Publicis is preparing to mount a hostile takeover
bid for True North intensified this week as Maurice Levy, the Publicis
chairman, threatened to scupper its US partner’s takeover of the Bozell
network.
Instead, Levy is urging True North, the FCB holding company, to pull out
and join Publicis in a worldwide merger.
His offer comes in an astonishing letter to the True North directors in
which he accuses them of paying 30 per cent too much for Bozell in a
dollars 440 million deal which he claims will do nothing to bolster the
group’s global presence.
As a result, he has promised that Publicis, True North’s largest
stockholder with an 18.5 per cent stake, will vote against the deal.
But the True North board has pledged to press ahead with the Bozell
purchase while rejecting any moves towards a merger with the
France-based network, from which it split acrimoniously in February.
Publicis sources suggest the merger offer is a ploy to pressurise True
North into calling off the Bozell purchase. ’Levy’s letter doesn’t
amount to a hostile takeover attempt,’ a senior executive said. ’But
Saatchis and Martin Sorrell have mounted hostile bids in the past and
hostility is a game to be played until you get the best value.’
’Bozell is primarily a US-based business with a weak international
presence and Publicis believes its acquisition by True North will
compound rather than resolve True North’s strategic weaknesses,’ Levy
says in his letter.
He goes on to suggest that a merger of the Publicis and True North
networks ’would create a powerful global presence with tremendous
opportunities for growth’.
But True North claims a merger would almost certainly lead to a fall-out
of key clients and employees. Bruce Mason, True North’s chairman, said:
’It is unrealistic to ignore a decade of difficulties between our two
companies.’
