Publicis in sales talk with private equity investor

Global advertising agency, Publicis Groupe, has reportedly held talks with a private equity investor about a possible sale or transaction.

According to Campaign, there were multiple reliable sources saying they knew of recent private equity interest in the French group.

“The sources pointed to CVC, one of Europe’s largest private equity firms, which has its headquarters in Luxembourg and has various investments, including sports media rights and the corporate public relations and advisory firm Teneo,” according to Campaign

Publicis Groupe is the world’s third-largest agency group by stock market capitalisation, behind WPP and Omnicom, and is valued at about €10.6bn (£9.5bn, $13bn).

All of the big six global agency groups suffered sharp revenue declines in Q2 and Q3 2020 but Publicis Groupe was the second-best performer after Interpublic, after lagging some of its peers in 2019.

Most of the agency holding company groups have suffered drops in their share price in recent years, before Covid-19, as clients have brought some marketing services in-house, cut agency fees and bought directly from tech giants such as Google and Facebook, while new competitors, such as Accenture, have emerged.

Publicis Groupe’s share price almost halved during the first three months of 2020 from €41 to a low of €22 in March, during the worst of the coronavirus slump, but sentiment subsequently improved.
The stock was still at €29 at the end of October but recovered strongly to end the year back at about €41. Publicis Groupe’s share price remains far below its most recent peak of €68 in early 2017.

Arthur Sdoun has been chief executive of Publicis since 2017. In an interview with Sadoun in April 2020, during the worst of the share price slump, Campaign asked him whether Publicis Groupe would remain an independent company or whether it was open to the possibility of Merger and Aqcquisition(Q&A).

“Publicis has gone through wars, fires and recessions, and has always maintained its independence,” Sadoun said at the time.
“There is no doubt we will have to make efforts above and beyond [to cope with the Covid downturn]. But, make no mistake, we will get through this crisis”.

The abortive Publicis Groupe-Omnicom tie- up would have been the biggest merger in advertising history with a $35bn valuation. Publicis Groupe was valued at €13.4bn ($17.7bn) in 2013.

Previously, Japan’s Dentsu bought Britain’s Aegis Group for £3.2bn in 2012 and France’s Vivendi acquired a 60% stake in the French agency group Havas for about €2.3bn in 2017 . Publicis Groupe itself bought data marketing company Epsilon for a total cash considerationof $4.4 billion (then equivalent to £3.36bn) in 2019.

Publicis Recent Abortive Merger talks
Marcel Bleustein-Blanchet founded Publicis Groupe in 1926 and the French company prides itself on its history.However, Publicis  Groupe has considered merger and acquisition in the past. Maurice Lévy, the then chief executive, agreed to a “merger of equals” with Omnicom in 2013, before aborting the plans before completion.

Publicis Groupe owns a string of leading agency businesses, including Epsilon, Leo Burnett, Saatchi & Saatchi, Bartle Bogle Hegarty, Publicis Sapient, Starcom and Zenith.
It employs about 80,000 people globally and reported revenues of almost€10bn in 2019.

Elisabeth Badinter, the daughter of Bleustein-Blanchet, controls 12.85% of the voting rights and is the top shareholder, according to the most recent annual report. Lévy, who stepped down as chief executive after 30 years in 2017 to become chairman of the supervisory board, controls about 2.5% of the voting rights



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