• by Joe Mandese  @mp_joemandese, January 3, 2006

In a move to simplify its balance sheet of debt and the potential dilution of its equity, Publicis Groupe this morning announced a plan to repurchase nearly $295 million in financial warrants. The move reflects the strong positive cash flow generated by Publicis units including Starcom MediaVest Group and ZenithOptimedia Group over the past year, and clears up some liabilities associated with Publicis' 2002 acquisition of Bcom3 Group.

On Monday, the Publicis board approved a tender offer for all 27,709,748 outstanding equity warrants in connection with the acquisition of Bcom3 Group.

Japanese agency holding company Dentsu, which backed Publicis in its takeover of Bcom3 Group, also announced its intent to exercise warrants representing 22 percent of the tender offer.

"We are pursuing our commitment to simplify the group's balance sheet with this repurchase, which should lead to the cancellation of a maximum 27.7 million potential shares," stated Maurice Levy, Chairman & CEO of Publicis. "Cash flow generated by the group over the past few years has allowed us to move ahead with a number of transactions that have greatly simplified our balance sheet and reduced future dilution of earnings per share. At the close of the current transaction, our capital structure will be strong and very stable, with future resources used to pursue our business development program and improve our returns per share."