Publicis shares rise on fresh M&A speculation about interest from Havas owner

Publicis Groupe’s share price has risen on fresh M&A speculation—this time involving Havas owner Vivendi.

Publicis Groupe’s shares rose 3% to about 52 euros, following the report by French business news service BFMTV, which said the ad agency group had “discussions” with media giant Vivendi in “recent months”.

BFMTV said in its story, which came out on March 25, that Publicis Groupe subsequently “dismissed” Vivendi.

A Publicis Groupe spokesperson told Campaign it had no comment and had no involvement in BFMTV’s report.

A Vivendi spokesperson told Campaign: “We have no comment on this unfounded rumour.”

There has long been speculation that Vincent Bollore, the top shareholder in France’s Vivendi, could be interested in merging its advertising subsidiary, Havas, with bigger rival Publicis Groupe.

Bollore is known as a shrewd investor who previously bought a large stake in Britain’s Aegis Group and sold it at a profit when Japan’s Dentsu bought the business in 2013.

Elisabeth Badinter, the daughter of Marcel Bleustein-Blanchet, the founder of Publicis Groupe, and her family are the top shareholders in Publicis Groupe, which is listed on the Paris stock market—as is Vivendi.

BFMTV also said in its report that Publicis Groupe held talks “for several weeks” with private equity firm CVC, which “proposed to buy the company and take it off the stock market”, at the end of 2020. 

Investment bank Deutsche Bank said in a note to clients that Publicis Groupe’s shares “out-performed” media peers on the day of BFMTV’s report and pointed out Badinter and Maurice Levy, the chairman of the supervisory board, together control “more than 15% of the voting rights that help protect Publicis’ independence” from any takeover.

Publicis Groupe’s share price is now at its highest level since May 2019, giving the company a valuation of about 12.9 billion euros (US$15.2 billion).

Vivendi is valued at 33.5 billion euros ($39.4 billion) and will soon have additional financial firepower as it plans to sell a chunk of Universal Music in an IPO.

Denial

Investor interest in Publicis Groupe has been mounting as the company has been among the best performers of the big six agency groups during the pandemic, after under-performing in 2019.

The share price slumped as low as about 22 euros in March 2020 but has more than doubled, passing 40 euros in December and has kept climbing.

Campaign previously reported on 7 January that Publicis Groupe held talks with a private equity investor about a potential sale or transaction and pointed to CVC as the suitor, although the story made clear that no formal negotiations or discussions were underway.

Campaign’s report sent Publicis Groupe’s shares up as much as 7% to 46 euros.

Publicis Groupe, which had declined to comment to Campaign before the publication of the private equity story, subsequently issued a denial.

“There are no talks of any sort going on,” Publicis Groupe said at the time.

Companies will sometimes receive informal approaches that do not lead to formal negotiations.

Publicis Groupe’s share price has risen further since January, partly on hopes of a general economic rebound after the pandemic and also the company’s performance under Arthur Sadoun, the chief executive since 2017.

Its organic revenue fell 3.9% in Q4—the best of the big six agency groups—and moved back into growth in the United States.

BFMTV’s story focused on Maurice Levy whose term as supervisory board chairman expires later this year but could be extended.

It quoted an unnamed source as saying that Publicis Groupe’s recent results put the company “in the position of the hunter and not the hare” when it comes to M&A.