Putting the Odds on a Publicom Collapse
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Tax hang-ups, regulatory delays and behind-the-scenes struggles have industry executives and analysts increasingly banking on a collapse in the planned merger of ad giants Omnicom Group and Publicis Groupe. “There is evidently a realistic chance that the merger with Publicis will not be completed, whether due to external factors or management preferences,” Pivotal Research Group analyst Brian Wieser said in a research note to investors late last month.
Progress seems stalled enough that Albert Fried analyst Rich Tullo lowered the chances of completion to 40% from 66% in a research note last week first reported by The Wall Street Journal. An Omnicom spokeswoman declined to comment; a Publicis spokeswoman in Paris did not respond to a request for comment Friday afternoon in New York.
But don’t expect either side to storm away on its own — even if one CEO starts to feel like he’s losing battles, like the fight to install his favorite as chief financial officer. The $500 million termination fee disclosed in a filing last summer and lately resurfaced in pessimistic press reports means that any unilaterally quitting party has to pay that sum.
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