• by David Kaplan , September 8, 2004

Meeting on the deadline to submit bids to buy Grey Global Group, Havas' board of directors Wednesday morning approved the recommendation of the Paris-based ad holding company's executive committee to make a play for Grey.

The company did not state how much its bid was, but at press time there were reports circulating of cash offers by WPP Group and private equity firm Hellman & Friedman making bids of $900 or more per share.

There had been uncertainty as to whether Havas could or would muster a bid for Grey, as a maverick shareholder opposed the deal, citing the difficult financial straits Havas appears to be in.

According to a report late Wednesday by The Wall Street Journal Online attributed to anonymous sources, WPP had made a cash offer of $1.25 billion, or more than $900 per share, to acquire Grey. Hellman & Friedman, which is teaming up with buyout firm Kohlberg Kravis Roberts & Co., reportedly made a bid of about $900 per share.

Grey shares closed the day of trading on Wednesday at $940 per share, or market capitalization of $1.31 billion, which would suggest that the initial take-out offers were below current market trading.

Havas, which some believe has the greatest strategic imperative to acquire Grey, might have bid as much as $1.45 billion.

Havas CEO Alain de Pouzilhac and WPP CEO Sir Martin Sorrell are both said to be intent on acquiring Grey. De Pouzilhac apparently considers Grey to be the key to turning around Havas' U.S. operations. He is being opposed by Vincent Bollore, the French corporate raider who reportedly has acquired a 5 percent to 10 percent stake in Havas. Bollore apparently considers Havas' financial state too precarious to absorb the cost of buying Grey.

In addition to the Bollore contretemps, Havas is also under pressure to find backing after various private equity firms, including Quadrangle, have walked away from the deal.