Publicis Delists From NY Stock Exchange, Side-Steps U.S. Securities Laws

In a move that would liberate it from onerous U.S. securities laws, Paris-based Publicis Groupe this morning announced its intention to "delist" the shares of its stock that are traded on a major U.S. stock exchange. The shares, known as American Depository Receipts, or ADRs, are traded on the New York Stock Exchange, and require Publicis to adhere to U.S. stock trading laws, including certain disclosure and certification rules imposed by the Sarbanes Oxley Act that have been bedeviling some big U.S. agency holding companies.

Compliance to those rules have cost Interpublic Group millions of dollars in legal and consulting fees, and has altered the way most big agency holding companies report their growth, especially media billings data.

To date, the only one of Madison Avenue's Big 6 holding companies that has been free of those obligations has been London-based Aegis Group, the parent of Carat, which does not trade ADRs on any U.S. exchanges.

Publicis, the parent of Starcom MediaVest Group, ZenithOptimedia Group, Denuo, and several big full-service shops, said it expects its delisting to become effective on Sept. 27. It would then transition to a "level one" status, allowing its ADRs to be traded on the U.S. over-the-counter market.

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"This decision by Publicis Groupe to delist from the New York Stock Exchange and to terminate the registration of its securities under the Exchange Act, in line with other European and other issuers, is motivated by both cost and liquidity considerations and is taken in the interest of all of Publicis Groupe shareholders," the company said in a statement, adding that ADR trading accounts for only about 1% of the volume of its total share trading, that it would improve its operating costs by making the move, and that it would continue to fulfill its disclosure requirements to Publicis shareholders under international financial reporting standards.

The company said the delisting and deregistration would have no impact on the primary listing of Publicis shares on Paris' Euronext exchange, and that the company plans to continue publishing English-language financial reports, statements and press releases.

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