Bolloré set for buying spree after Aegis deal

Japanese advertising giant pays £3.2bn for British group, handing windfall to its top shareholder

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.

"This is another trading coup for Bolloré," said Sir Martin Sorrell, chief executive of British rival WPP.

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," said one senior industry figure.

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. Morgan Stanley is acting for Dentsu, and Greenhill and JP Morgan Cazenove are advising Aegis.

The sale is not unexpected as Mr Buhlmann, who was promoted to chief executive in 2010, made Aegis more attractive to a potential buyer by selling the market research firm Synovate last year.

Aegis has also been expanding fast in digital, and recently won a major global media account with General Motors.

The Panmure Gordon analyst Alex DeGroote praised Mr Buhlmann for reviving the group, after it spent more than a year without a permanent chief executive during the credit crunch. "It was in a mess," said Mr DeGroote, who said that the sale of Synovate and now the rest of the group has meant "everyone has made quite a lot of money".

This is just the latest in a wave of acquisitions in British advertising in the last two months. This included WPP's purchase of the digital agency AKQA with a £350m valuation and the acquistion of the creative agency Bartle Bogle Hegarty by the French group Publicis for well over £200m.

Media mogul: Vincent Bollore

Vincent Bolloré's decision to sell his stake in Aegis finally ends one of the longest on-off takeover sagas in City folklore.

Mr Bolloré, who is chairman of French rival Havas and one of his country's richest men, spent years trying to seize control of Aegis with a view to a possible merger.

He started buying into the British group from 2004 between 110p and 140p a share and called no fewer than five general meetings.

But when the credit crunch hit, Mr Bolloré gave up the chase and became somewhat more conciliatory. He signalled last year that his Aegis stake was just an investment, opening the way for yesterday's 240p-a-share sale at a handsome profit.

"An interesting question will be what he decides to do with the cash, especially given his recent involvement with Vivendi which is seeking buyers for assets," said analysts at Jefferies bank, referring to a possible break-up of the group, which owns a range of trophy businesses, including telecoms, the world's biggest record label, Universal, and the games company Activision.

Some say Mr Bolloré has become less interested in advertising and he has certainly become passionate about eco-cars – a pet project – but his son Yannick is a senior executive at Havas.