Is activist investment firm Elliott Management gearing up for a proxy battle to gain representation on the Interpublic Group of Companies board of directors? That’s what The Wall Street Journal has reported, although neither Elliott or IPG are commenting at this time.
Elliott disclosed in July that it had amassed 6.7% of IPG’s stock, making it a major shareholder in the New York-based ad marketing holding company. At the time Elliott said it thought IPG’s shares were undervalued and that it would hold talks with IPG management to discuss ideas for boosting the share price.
Board representation would provide Elliott with greater leverage when presenting its ideas, and it has some time to prepare for a proxy fight if that’s the firm’s intention — board nominations don’t open until late January. Between then and now, of course, the two sides could come to an agreement that resolves issues between the investor and company management.
When it disclosed its IPG investment, Elliott also said it intended to talk to third parties, including “potential acquirers” of IPG, which would be Elliott’s preferred outcome. With IPG trading at a little over $19 a share now, Elliott has already made a profit on its investment — it was buying shares when the stock was trading in the mid-teens. An acquisition would bring a premium beyond the current price.
For now, however, it appears that the list of potential acquirers is dwindling. Two potential buyers — Publicis Groupe and Dentsu — have recently signaled they have other plans. Earlier this week, Publicis confirmed it will acquire Sapient for $3.7 billion and analysts say it is unlikely the firm would make a play for IPG before fully absorbing the firm, which owns digital agency SapientNitro and a management consultancy. Dentsu Executive Tim Andree recently told attendees at an investor conference that the Japanese-based ad firm was not currently interested in pursuing an IPG acquisition.
Another potential IPG suitor is Havas Group, although analysts have mixed opinions about Havas’ long-term plans. Some say Bollore Group’s recent move to take a majority equity stake in Havas secures Bollore’s ability to exit the business on its own timing. Others see it as a sign that Bollore will stay in the ad game long-term and may look to expand its holdings.