Loan Boosts Bollore's Efforts To Control Havas

by David Kaplan, Dec 28, 2004, 12:00 AM

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Corporate raider Vincent Bollore appears to be setting the stage to increase his 20 percent stake in French ad agency holding company Havas.

After having united all Havas shares held by four subsidiaries within a single entity earlier this month, the Bollore Groupe now intends to use its 55.1 million shares of Havas stock to back a new five-year, 200 million-Euro ($271 million U.S.) loan from an unnamed "leading French financial establishment."

The 55.1 share in Havas equals just under two-thirds of Bollore's holding in the advertising company, Bollore said in a statement. A Bollore spokesman added that the deal could eventually position Bollore to acquire a larger slice of Havas, which owns such advertising companies as Media Planning Group (MPG) and Euro RSCG Worldwide.

On Dec. 22, the Bollore Groupe brought together all Havas shares held by four of its subsidiaries within a single entity, Bollore Médias Investissements, whose shareholders are Compagnie du Cambodge (55.5 percent), Bollore S.A. (32.5 percent), and Société Industrielle et Financière de l'Artois (12 percent).

This financial vehicle thus holds 86.4 million Havas shares, representing 20 percent of the company's capital and voting rights, with a stock market value of approximately 350 million euros, or just over $400 million U.S.

At the same time, the Bollore Groupe set up a structured operation with "a leading French financial establishment"--a spokesman wouldn't provide the name--which enabled it to obtain 200 million euros ($271 million U.S.) by pledging 55.1 million Havas shares.

"The operation was set up for a five-year period, but can be unwound at any time on the sole initiative of Bollore Médias Investissements, which will preserve, throughout the operation, the property of the shares and associated voting rights as well as the financial exposure due to the fluctuations of the Havas share price," a Bollore spokesman said.

Bollore's actions over the past few months have led Havas senior executives, such as Chairman and Chief Executive Alain de Pouzilhac, to speculate that Bollore was interested in seizing control of Havas. So far, Bollore has used his role as a major shareholder to increase his criticism of the company, as it currently fights to hold onto two major accounts, Intel and Volkswagen, sources noted.

Most recently, Bollore was known as a dissident shareholder opposing Havas' bid to buy Grey Global Group, which was won by WPP Group.

Back in September, in an interview with London newspaper The Guardian, WPP CEO Martin Sorrell admitted that he and Bollore had spoken, igniting further speculation over the future of Havas. Sorrell said he had discussed Havas with Bollore, but declined to go into detail. "We have been in touch," he told the newspaper's online edition.

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