New Havas boss gets 2014 off to an intriguing start with coy sale stance

13th January 2014

The new year couldn’t have gotten off to a better start – at least for M&A buffs in the marcomms industry.

Just yesterday (9 January), Yannick Bolloré, the newly-installed boss at holding group Havas, seemingly left the door open on the subject of whether Havas may be sold at some stage in the future.

The day before, Havas’ long-standing CEO, David Jones, announced that he was resigning to launch his own start-up. Jones, who had been with Havas 15 years, seems to have departed amicably – he will remain as an advisor to the new CEO and the chairman (and Havas’ biggest shareholder), swashbuckling corporate raider Vincent Bolloré, so continuity is pretty much assured.

For his part, Jones told The Drum yesterday that he had “always had a burning desire to be an entrepreneur” and that he’d been presented with an opportunity “too good not to seize.” The exact nature of his new venture, which will be launched next month, is not known; but it will almost certainly involve tech and/or social media, something confirmed by Jones himself: “Those people who know me know my two passions in business are social media and social responsibility and this new venture combines the two,” he said.

This will be extremely interesting, given Jones’ track record – watch this space.

But let’s return to Havas. What do we know of the new man at the helm?

Well, Bolloré, who is just 33, is the son of Vincent Bolloré. He seems to have inherited some of his father’s entrepreneurial flair, having set up his own film production company aged only 22. He joined Dad’s company in 2006 as programme director of Direct 8, a then fast-growing French TV station. By 2009 he’d become president of Bolloré Media before becoming vice-president of Havas just under three years ago.

During his time at BM and Havas, he’s led and initiated a number of high-profile deals, including the purchase of the Virgin 17 TV station in France. In September 2011, he sold the TV arm of Bolloré Media – which at the time was the third-biggest commercial radio and TV broadcaster in France – to media giant Vivendi for a massive €465m. Most of this was in Vivendi shares, which makes the Bolloré family the biggest Vivendi shareholder.

In addition to this deal, Bolloré Jr. founded several companies including Havas Productions, H2O Productions and Direct Cinéma, a joint film production company. So he appears to be an energetic wheeler-dealer, just like his Dad.

Asked at a media conference in Paris whether Havas’s long-term future was to remain as an independent or combine with another holding group, Bolloré acknowledged that scale was crucial: “Especially in media, but even in creativity, scale is very important. Clients are getting more and more globally organised… so they need to have partners that are globally organised,” he said.

Havas is the smallest of the major global holding companies, reporting annual revenues of £1.6bn. It’s dwarfed by WPP (revenues about eight times bigger) and by both Omnicom and Publicis, whether the two eventually merge or not.

Increased consolidation has prompted speculation that WPP or Dentsu could buy Havas, or that it may merge with, or attempt to buy, IPG. Personally I think WPP buying Havas is unlikely – it doesn’t fit in with Sir Martin Sorrell’s stated strategy of organically building in Asia Pacific, South America, Africa and the BRICS, MINTs (Mexico, Indonesia, Nigeria and Turkey) and other emerging economies. Publicis-Omnicom would in all likelihood be prevented by the regulatory authorities from making any more large purchases; and even if it doesn’t, I can’t see Publicis making a move, although there’s a faint possibility it might given the French head office connection.

Dentsu, newly energised and pursuing a more aggressive strategy since buying out Aegis (which was itself a target for Havas and Bolloré Senior for many years) would be more likely, as my colleague Tony Walford wrote in this column last month. This would give Dentsu (which still does most of its business in Japan) more scale and penetration in Europe and the US, and there are obvious shareholder value enhancing synergies between Aegis and Havas.

Some sort of merger (as opposed to an aggressive takeover) between IPG and Havas remains possibly the most intriguing scenario. It would give protection for both companies from a hostile takeover, and there are complementary synergies between the two – IPG’s strengths in fast-growing specialisms like sports marketing (Octagon), PR (GolinHarris, Weber Shandwick) and digital (R/GA) as well as its global reach with its big networks McCann, DraftFCB and Lowe; and Havas’ strength in media and its more entrepreneurial culture.

Bolloré said at yesterday’s conference: “What’s important is not to be the biggest, but the fittest.” He pointed to recent global account wins for Havas Media Group – Emirates and LG Electronics – which he said reinforced the fact that Havas is a global player.

“We are in more than 100 countries so we have a global size,” he said, “and we are able to win and serve clients globally. We are big enough to handle global clients, and to do global negotiations, especially with the tech companies. But we are not too big, and we are not too fat. We know that social media is revolutionising everything, so I think it’s important that we stay at a size that allows us to adapt to the new paradigm of communications.

“In this very fast world that we are living in, it’s important to develop a long-term strategy. The fact that we have a peaceful shareholding structure truly helps us to develop this long-term strategy policy.”

That to me is very revealing. Father and son will want to realise the value of their holdings in Havas, which doesn’t rule out a straight sale if the price is right; but never underestimate the pull of dynastic empire building. I don’t know Vincent Bolloré, but like most fathers, he’ll want his son to do well, and I suspect that the idea of him being the head of an international Havas-IPG grouping, able to compete on equal terms with WPP, Aegis-Dentsu and Publicis-Omnicom would be very appealing.

Will 2014 see the end of Havas as an independent entity, or as an enlarged global network ready to compete with the giants? Time alone will tell – but it’s going to be a very interesting few months. I can’t wait to see how this pans out.