Publicis is bringing down the curtain on one of the bitterest
agency disputes in world advertising history by allowing True North to
end its financial involvement in the French group.
An escape route is being created through a restructuring of Publicis,
which will allow its former US partner to transform its non-publicly
traded investment into publicly traded shares.
The move is being made possible through the merger of Publicis
Communication, a non-public subsidiary in which True North has a 26.3
per cent stake, into the group.
If Publicis shareholders give the plan their backing on 11 December, the
group will issue $146 million worth of new shares. It will offer three
new shares in exchange for every two of Publicis Communication, a
holding company primarily for the group’s European activities.
The move was immediately welcomed by True North, which will end up with
a 8.8 per cent stake in Publicis. The company said it had been urging
Publicis to do it ’because it enables us to take the final step to
unwinding at the parent level’.
Publicis, True North’s largest shareholder, is undecided what to do with
its 10.6 per cent stake. Maurice Levy, the Publicis chairman, indicated
this week that the answer could be a share swap between the two: ’The
value of what True North would receive would be higher than the value of
the shares we have in True North.’
Levy said he was reluctant to dispose of True North shares while their
price remained disappointingly low. ’We’ve enough cash to do what we
wish so we may hang on to them and wait for better days,’ he added.