Insults fly in the battle of the billboards
More steps up the war of words in its effort to rebuff a bid from its French arch-rival. Christine Harper reports
Sunday 03 May 1998
Ever since Decaux launched its pounds 475m cash bid for More on 30 March, a regular stream of discouraging remarks have been directed against the French company by both More's chief executive, Roger Parry, and Clear Channel Communications of the US, whose pounds 446m offer had been accepted by Mr Parry before Decaux unveiled its bid.
Mr Parry insists his comments - which range from disparaging Decaux's competitive practices in France to wondering whether its chairman, Jean- Francois Decaux, is "two baguettes short of a picnic" - merely reflect his efforts to maintain More's competitive edge. Investors say they are confident that he is doing the right thing, because even though Decaux's bid offers more money to shareholders, it remains likely that it will meet opposition from the Office of Fair Trading.
"It's well known that More group and Decaux are quite fierce competitors, and it's appropriate for him to continue to compete with Decaux until a bid succeeds," said Crispin Finn, a fund manager at Capel-Cure Myers Capital Management. "As a shareholder I want him to stand up for the More Group."
Still, the anti-Decaux rhetoric has not helped More's shares. Hopes that Clear Channel would top Decaux's pounds 11.10-a-share bid drove More's share price to pounds 11.90 earlier this month. Since then, doubts have grown about Decaux's chances of winning regulatory approval, and shares are down to pounds 11.03.
"I think Parry is playing quite a careful game," said Simon Lapthorne, analyst at Granville Davies. "If Decaux's bid gets referred, as personally I think it probably should, then presumably that would allow the Americans to get it at their current price."
He questioned, however, whether it makes sense for Mr Parry to continue his frequent negative remarks about Decaux in the press: "As things stand at the moment, the Decaux bid has more in it for shareholders."
Clear Channel, a San Antonio-based broadcaster, has already won approval from the OFT because its purchase of More would represent its first step into the European outdoor advertising market. The company said on 17 April that it had 11.37 per cent of More's shares and reiterated: "The Decaux offer raises significantly greater public interest issues than those raised by Clear Channel's offer."
Decaux's offer, meanwhile, hinges on whether the OFT is concerned that Decaux and More are the only two companies that provide bus shelters and other outdoor conveniences to local government authorities in the UK.
Decaux has released a survey of 119 local governments in which it found only 10 were opposed to Decaux buying More, with the rest either neutral or supportive of the bid. But the UK's Local Government Association, which has not conducted a formal survey, said a small but significant number of its members have voiced opposition to the Decaux bid, while none have indicated support.
"We've heard from significant large authorities who hold multi-million pound contracts and they have concerns," said Andy Elmer, the LGA's head of planning, transport and the environment.
He said the association will try to assess more of its 500 members in time to give the OFT a better overall view of the concerns posed by a Decaux-More link-up.
The OFT has said it will make a recommendation to the Department of Trade and Industry by 22 May.
Meanwhile, More and Decaux continue their sparring, much of it through the press.
In the latest twist, the Daily Telegraph quoted Mr Parry saying a takeover would give Australian Provincial Newspapers the right to buy out More's stake in their Australian joint venture, Adshel Street Furniture, and that Decaux was "despondent" at this news. The article points out that Clear Channel already has a radio joint venture with APN.
"I keep quoting- but nobody ever runs it - that francs are as good as dollars," Mr Parry said in a recent interview.
"We are waiting for the OFT to complete due process, and whilst that is going on Decaux remains my principal worldwide competitor."
He admits, however, that long-held animosity and cultural differences make him innately suspicious of Decaux.
"They are a very secretive, private family company and we are a widely held public company ... it's a fundamentally different culture," he said. "It is difficult for me, because my staff regard Decaux as the enemy, as the competitor."
Granville Davies' Mr Lapthorne said the entrepreneurial Mr Parry would never stand for working under the thumb of the Decaux family, even though the family has said it plans to go public within a few years.
"The suggestion that he'd ever work for them is laughable," Mr Lapthorne said.
Asked whether he would feel comfortable working for Decaux, Mr Parry responded: "I'll tell you if it happens - it's different working for a single shareholder than it is working for a group of shareholders.
"My natural career is much more to do with running public companies than it is to do with the subsidiaries of another company."
Copyright: IOS and Bloomberg
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