LIVE ISSUE/THE PUBLICIS-TRUE NORTH WRANGLE: Adland’s Napoleon licks wounds after US debacle - Maurice Levy’s bid to halt a US merger was defeated. What now, John Tylee asks

If Maurice Levy is advertising’s modern-day Napoleon, then his tangle with True North, the FCB holding company, may turn out to have been his Waterloo.

If Maurice Levy is advertising’s modern-day Napoleon, then his

tangle with True North, the FCB holding company, may turn out to have

been his Waterloo.

Last week’s defeat of the Publicis chairman’s attempt to pave the way

for a takeover of his former global partner, by torpedoing its dollars

440 million merger with Bozell, was of a scale that surprised even the


In the end, Levy’s cavalry charge was no match for the combined heavy

cannon of the US legal system and the advertising establishment. Time

and again judges in Illinois and Delaware repulsed Publicis’s attempts

to influence the vote on the Bozell deal by True North shareholders.

Yet had Levy been free to put his case to shareholders - his last appeal

to the courts was rejected the day before the deal won shareholder

approval - it seems likely that the trouncing would have been just as


Indeed, it was only the 18.4 per cent vote of Publicis - True North’s

largest shareholder - that opposed the deal at a brief meeting of

shareholders in Chicago on 30 December.

That vote set the scene for the creation of the world’s sixth-largest

global network, with billings of dollars 12 billion. True North

executives later claimed to have had the endorsement of 95.6 per cent of

the proxies delivered ahead of the meeting. It was, according to Bruce

Mason, True North’s chairman and an unlikely Duke of Wellington,

’extremely gratifying’.

In his office overlooking the Arc de Triomphe in Paris, Levy must plot a

recovery that will give him the US presence needed if Publicis is to be

a serious global player. ’Maurice can’t be looking forward to a very

happy new year,’ a True North source chuckles.

For the moment, Levy is left with a festering resentment of a US legal

process he believes was weighted against him. ’We were muzzled by the

judicial system,’ he says. ’I can’t believe the country of free markets

can be so protectionist.’

Had he succeeded in his audacious gamble - ’more an emotional reaction

than a carefully thought-out plan,’ according to one former global

network chief - he would certainly have found the vehicle for his

vaulting international ambition.

Instead, he was forced to beat a hasty retreat, telling the US

Securities & Exchange Commission of his intention to withdraw Publicis’s

offer of dollars 28 for each of more than 9.6 million True North


Few doubt that this is a precursor to a complete disentanglement of the

financial stakes each company has in the other. True North insiders

indicate the group will shed the 26.5 per cent of Publicis shares it

owns if the price is right. Publicis, its stakeholding in the enlarged

True North diluted to about 10.5 per cent, will only retain its

boardroom seat beyond next spring in the unlikely event of it restoring

its stake to its pre-merger level.

Throughout the dispute with True North, Levy has insisted that Publicis

will have a global network within 12 months, irrespective of whether his

takeover bid succeeded. ’This isn’t really a setback and it doesn’t

change our plans,’ he says. ’It’s just a missed opportunity.’ However,

the process may be slower and more piecemeal than intended - and may

stretch the patience of major clients such as Nestle and L’Oreal the

longer a credible US presence is delayed.

Also, there is a risk of raids on Publicis business by those clients’

other roster networks. ’Levy’s time is running out,’ a US industry

source says.

Levy’s search for a solid US toehold will not have been helped by the

publicity surrounding the True North affair.

Moreover, the recent history of French forays into the US agency scene

gives little cause for optimism. Witness BDDP’s acquisition of the

overpriced New York shop, Wells Rich Greene, which promptly turned into

a millstone dragging BDDP into deep financial trouble.

’There always seems to be a natural antipathy in US agencies towards the

French,’ Richard Humphreys, the former Saatchi & Saatchi Worldwide and

N.W. Ayer boss, says. ’US agency people build their careers on their

clients, so it’s difficult for an outsider, particularly a foreign one,

to manage them.’

But the most intriguing question posed by the Publicis/True North spat

is whether hostile takeover bids will become as regular a feature of the

global advertising power game as in other industries.

’Never before has there been an ad industry fight like this, with a

couple of giants taking off the gloves and going eyeball to eyeball with

each other,’ a US industry observer points out. ’Advertising is now a

global business like any other.’

Nevertheless, other factors will continue to make hostile bids a risky

option. True North chiefs always maintained that a successful Publicis

takeover would have provoked many senior managers to resign. They also

say that the threat from S.

C. Johnson, the cleaning products manufacturer and one of FCB’s biggest

global clients, to rip out more than dollars 400 million worth of

business should Levy win control, may well have sealed his fate.

Meanwhile, as Levy ponders the lessons of a bruising encounter, even

True North insiders admit a sneaking admiration for his chutzpah. ’It

was a great attempt to steal a company,’ confides one. ’If he’d pulled

it off he’d have been hailed as the new Martin Sorrell.’