Havas has long been thought of as a potential buyer for one of the few remaining smaller advertising networks. It has in the past been linked to Cordiant Communications and Grey Global Group. Cordiant and Havas are understood to have held talks earlier this year about a possible $1bn (£687m) takeover, which came to nothing.
Havas chief executive Alain de Pouzilhac told the Wall Street Journal that he does not see the need for a major acquisition and believes that Havas can compete by both growing organically and making smaller acquisitions.
"At this time, we don't have any major acquisition in our head," de Pouzilhac said. "Of course, if we have a strong opportunity, we will look at it, but at this time we don't need scale for scale's sake."
However, his view is not shared by industry analysts who argue that Havas lacks the scale of its bigger rivals including Publicis, which earlier this year pulled off a $3bn coup with its acquisition of Bcom3 to become the world's fourth-largest advertising network.
When the acquisition of Bcom3 is completed on September 20, Publicis will have revenues of around $4bn, almost double that of its smaller rival. It will also have three major advertising agency networks in Publicis, Saatchi & Saatchi and D'Arcy/Leo Burnett. Havas has only Euro RSCG Worldwide and smaller, less-international agencies such as WCRS and Arnold.
It is also seen to be weak on the media planning and buying front. Its Media Planning Group lags a long way behind the reach of that of its rivals. This is something that Pouzilhac knows too well. It was a problem he tried to fix last year with an attempted purchase of Tempus-owned CIA, a deal finally thwarted by WPP Group.
A deal to buy Cordiant would also give it 25% of Zenith Optimedia Group, as well as control of Bates Worldwide. It known to have the funds to complete the deal, having raised cash through a convertible bonds issue earlier this year.
A recent note from investment bank Credit Suisse First Boston summed up many industry opinions: "We believe Havas needs to acquire scale and scope. The Publicis acquisition of Bcom3 has left Havas in the unattractive position of being a potential acquirer with few targets left."
However, despite his denials, troubled Cordiant is still seen as a target. Its weakened share price also makes it an attractive target. With Michael Bungey about to exit the picture following today's official announcement, there could be an incentive to hurry a merger along.
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