Havas soars as investors return to 'discounted' shares

PARIS - Shares in Havas, the French advertising group that owns the Euro RSCG Worldwide, look set to continue rising today after closing up 10% in trading as analysts said the stock was undervalued.

Havas rose to a high of €5.92 before falling back to close at €5.79. This morning, the shares continued to rise, up by 0.88% in the first hour of trading on the Paris bourse to €5.75.

In a report, Jacques Falzon, a media analyst at KBC Securities in Paris, said: "Havas trades at a sharp discount compared with Publicis... this is catching up at the end of the year."

Over the past month, Havas shares have regained 23.11% of their value, but the share price is still down by 29.5% since the beginning of the year, when it was €11.

Rival French advertising holding company Publicis Groupe, which merged with Bcom3 in September, was trading up by 0.69% this morning, with shares valued at €26.18.

Havas said that revenues fell by nearly 6% to €443m (£285m) for the third quarter of the year, partly caused by an advertising freeze by WorldCom, the US telecoms company facing investigation over its accounting practices.

In an interview last week, Havas chairman and CEO Alain de Pouzilhac said that Havas aimed to improve its operating margin in 2003, although he gave no target. He also said that clients were expecting to boost adspend by around 3%.

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