Reports: Is Private Equity Eyeing Publicis Groupe?

Reports: Is Private Equity Eyeing Publicis Groupe?
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Over recent days reports in the UK have surfaced that bosses of the Paris-headquartered Publicis Groupe have sounded out a private equity firm for a possible part or full sale.

The rumours were first reported on UK media site Campaign last week and have since been embellished further in the media in previous days.

The private equity firm is believed to be the Luxembourg-based CVC Capital Partners who had the controlling interest in F1 until it sold the rights in 2016. It also owns the corporate public relations and advisory firm Teneo.

Campaign reported that the secret discussions were held prior to Christmas, but added: “The exact nature of the conversations is unknown and it is not clear how far they progressed.”

When pressed, a spokesperson for CVC said it did not comment on “rumours”. While Publicis has not publicly commented on the speculation.

Publicis, of course, lists agencies such as Leo Burnett, Saatchi & Saatchi, Starcom and Zenith on its books and is the third biggest of the holding companies behind WPP and Omnicom. It’s current value is said to be around $A16.6 billion and it employs about 80,000 people globally.

Back in October, it reported better than expected financial results given the impact of COVID. At the time it reported annual growth at 2.7 per cent.

Publicis’ share price got smashed from €41 ($A64) to €22 ($A35) at the height of COVID, however, has since recovered.

Under CEO Arthur Sadoun, Publicis has increasingly turned its attention away from traditional media and invested heavily in tech-based consultancies that include Sapient and the recently-acquired Epsilon. A full or partial sale of the business would allow the group to invest in expanding its tech capacity.

As an example, Publicis may choose to sell off its agency businesses and solely concentrate on the consultancies.

It could also come under pressure from investors for a sale, as profits stall as the tech giants continue to eat its lunch. Or, le déjeuner, as the French say.

While an impediment to any sale could possibly come from family members of Publicis’ founding father Marcel Bleustein-Blanchet who still sit on the board and would probably veto any move.

In an interview with Campaign back in the height of 2020’s pandemic, Sadoun was asked about a possible merger or acquisition.

He said: “Publicis has gone through wars, fires and recessions, and has always maintained its independence.

“There is no doubt we will have to make efforts above and beyond [to cope with the COVID downturn]. But, make no mistake, we will get through this crisis,” he said.

 

 

 

 

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