Aegis sale could herald Bolloré acquisition spree

The Japanese advertising group Dentsu has splashed out £3.2bn to buy Aegis, fuelling speculation that the British group's top shareholder, the French mogul Vincent Bolloré, is about to go on an acquisition spree.

Dentsu's 240p-a-share takeover of Aegis, Britain's second-largest ad group, is at a 48 per cent premium to the FTSE 250 firm's share price.

Mr Bolloré, who held a 26.4 per cent stake worth over £800m, is set to walk away with a big profit. He is reportedly looking at buying some of the assets of the telecoms and media group Vivendi, which owns Universal Music and the games firm Activision and is facing a possible break-up. He already holds a 5 per cent stake in Vivendi.

Dentsu's merger with Aegis will unite the world's fifth and seventh largest ad groups, with a client list that includes Disney, General Motors, British Gas and eBay.

Mr Bolloré yesterday sold an initial 15 per cent stake to Dentsu, and analysts reckoned there is little chance of a rival bid as the Japanese group is paying a "full price" – around 12 times Aegis's earnings and 19 times future profits.

Aegis's chief executive, Jerry Buhlmann, said: "We see it as a great combination with a very complimentary strategic fit." Dentsu, Japan's second-biggest ad group, is strong in its homeland, while Aegis has a big presence in media-buying and digital in America, Europe and emerging markets.

Tim Andree, senior vice-president of Dentsu, said: "We're going to end up in a position where we are serving more clients with more capabilities globally." Some observers questioned the £3.2bn valuation. "Right strategy, wrong price," one senior industry figure said.

Mr Buhlmann has committed to stay until at least the end of 2013, and Aegis will keep its headquarters in London. The Aegis chief is in line for a £10m windfall as 3.6 million shares and close to another million options will vest. Mr Buhlmann said "hundreds" of senior staff at Aegis also hold shares that will vest.

The £3.2bn deal will mean a fees bonanza for City advisers that is likely to run into tens of millions of pounds.

"This is another trading coup for Bolloré," said Sir Martin Sorrell, chief executive of WPP, the world's largest marketing group. Aegis and Dentsu will rank as world No 5.

Comments