Publicis to sell True North stake if $700m offer fails

Publicis will sell its existing stake in US group True North if it fails in its $700m (437m) bid to buy the company and look at alternative collaborative ventures with US groups, according to analysts and agency insiders.

Publicis president and chief executive Maurice Levy refuses to say what the group’s next move will be.

Publicis has an 18.5 per cent stake in the US company, which includes the Foote Cone & Belding network. Publicis launched its offer, not yet a formal bid, two weeks ago with a confidential letter to the True North board just as the group was to complete a $440m (275m) takeover of US agency Bozell Jacobs Kenyon & Eckhardt.

If the Bozell deal is struck, Publicis’ share in the merged company will dip to about ten per cent, leaving it with little control and therefore little option but to sell its True North stake and rethink its US strategy. That could only mean buying another group or entering another alliance. Publicis needs a global network to handle Nestlé and L’Oréal, and, increasingly, to compete for MasterCard and Coca-Cola accounts.

Some observers believe the Publicis bid was designed to boost the share price in anticipation of selling its stake once the Bozell deal is complete. True North chairman and chief executive Bruce Mason says: “I don’t know why it (Publicis) would keep its stake in the company after the Bozell deal and tie up a big chunk of assets in an agency that it had less control of.”

News Analysis, page 20

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