Havas slams the door on WPP takeover chatter

PARIS: Yannick Bolloré has had enough of the gossip. The Havas chief executive told employees on 17 November  that his French advertising group is “not in discussions with WPP” about taking a stake in the embattled British rival—despite a weekend of frenzied speculation that sent WPP’s battered shares rocketing 11 per cent.

The Times had reported that Havas was eyeing either a chunk of WPP or its media agency arm, prompting talk that private equity sharks Apollo and KKR were also circling. An American advertising executive poured petrol on the flames by telling Adweek the two sides were in “very serious” discussions. By Monday morning, WPP shares were the FTSE 100’s biggest climber.

Bolloré’s internal memo, seen by multiple outlets, sought to kill the chatter stone dead. “Given the recent press coverage amplifying these rumours and the questions we’ve received from colleagues and clients, we want to clarify that we are not in discussions with WPP,” he wrote. Havas, he noted, delivered 3.8 per cent organic growth in the third quarter—outpacing rivals whilst WPP stumbles.

The Paris-based group does have an appetite for deals, Bolloré acknowledged, but prefers “bolt-on and targeted acquisitions” to mega-mergers. “While we could consider a larger acquisition aligned with our strategy,” he added, “there are currently no ongoing discussions of that nature.”

WPP needs all the help it can get. Its shares plunged 16 per cent in late October to their lowest level since 1998, after another round of missed forecasts. Chief executive Cindy Rose called the performance “unacceptable” and drafted in McKinsey to devise a turnaround strategy. The company’s market value has cratered from £25 billion in 2017 to roughly £3 billion today, putting its FTSE 100 membership in jeopardy.

The frenzy underscores how desperate investors are for consolidation in a sector squeezed by digital platforms and shrinking budgets. Omnicom’s $13.5 billion swoop on Interpublic Group is set to close this month, whilst Dentsu is mulling a sale of its international operations.

For now, though, Havas is keeping its powder dry. Bolloré signed off by urging staff to ignore the “rumours and noise” and focus on the firm’s AI-driven strategy. Translation: don’t hold your breath for a white knight rescue of WPP.

Here’s the full contents of the internal note: 

Dear all,
It’s our policy not to comment on market rumors, however, given the recent press coverage amplifying these rumors and the questions we’ve received from colleagues and clients, we want to clarify that we are not in discussions with WPP.
As you know, Havas has delivered strong results over the past months in a world full of uncertainties. In Q3, we achieved organic growth of +3.8%, outperforming the market, reflecting remarkable client wins and expanded collaborations with long-standing partners. Thanks to your commitment and energy, we continue to reinforce our market position and drive growth.
Havas has a strategy of bolt-on and targeted acquisitions that contributes to our strong momentum, alongside strategic partnerships. While we could consider a larger acquisition aligned with our strategy, as stated during our Q3 earnings announcement a few weeks ago, there are currently no ongoing discussions of that nature.
Undistracted by rumors and noise, we remain focused on accelerating the deployment of our Converged.AI strategy, driving group-wide AI adoption, and delivering excellence for our clients and prospects.
Let’s keep pushing forward with ambition and confidence, shaping the future of our industry together.

Sincerely,
Yannick