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Havas will invest €400mn in artificial intelligence and data-led initiatives in the next four years as the French advertising agency prepares to split from parent company Vivendi.
Yannick Bolloré, chief executive of Havas, said the initial work on the four-way break up of Vivendi was progressing ahead of a potential listing of Havas next year.
“There are no major obstacles right now,” he said, adding that Vivendi’s management would submit the final plans to its supervisory board, which would then decide whether to go ahead in the coming months.
Under the plans, Havas would be separated into a standalone company, while the other businesses would be media group Canal+, a publishing and distribution company comprising Lagardère and Prisma Media, and an investment company.
In an interview with the Financial Times ahead of the launch of the new AI strategy — its first major strategic update in 10 years — Bolloré said that no decision had been taken about which stock exchange would be chosen for Havas’s flotation. “It’s still open to debate,” he said.
He declined to comment on the political situation in France, which has been in turmoil since President Emmanuel Macron’s shock announcement that he would dissolve parliament and call fresh elections after his party was routed by the far right in European elections.
Bolloré pointed out that less than a fifth of its business was based in France. This raises the possibility that it could seek the larger pools of capital in the US where rivals such as IPG and Omnicom are based.
The break-up of Vivendi was designed to address the large discount between its stock market price and the value of its assets, he added, and would free the respective businesses to invest more in the future.
“When you look at the stock performance of Vivendi, we are suffering from a huge conglomerate discount — 45 per cent on average — and this conglomerate discount is preventing us from doing big investments.”
Two-thirds of the global media conglomerate’s shareholders would have to vote in favour of the deal. The Bolloré family controls about 30 per cent of the stock.
“We don’t have the two-thirds majority with the Bolloré family. So we need to convince the other shareholders,” he said.
Existing shareholders in Vivendi will be given the same stake in each of the four operating businesses, which means that, initially, the investor list will remain the same. However, Bolloré saw this changing quickly. “We’ll have some shareholders who will sell their shares because they are no longer interested in Havas, and some new shareholders will come and invest,” he said.
On Tuesday, Havas would set out the next part of its “evolution”, he added, including a €400mn overhaul of internal processes and the adoption of AI technology across the group.
Bolloré admitted that advertising agencies would need to work harder to justify their fees if their clients were able to use the same AI tools that made the more basic roles easier.
“If the client can replicate what we are doing with AI internally, there is no point to work with and to pay a communication agency or companies such as Havas. What I want is having the best tool available for the best talents.”
He did not anticipate any jobs being lost in the adoption of AI, however. “I don’t believe this will create fewer jobs. What’s important with this new way of operating is to make sure that all our people are trained on using these new pieces of technology, these new opportunities.”
Analysts say that having a separately listed Havas would make any future dealmaking easier, such as a merger with one of its rivals. Many ad executives expect consolidation in the industry, with rumours constantly circulating about the possibility of bringing together one or more of the six large operating groups. Havas has been linked in rumours with a potential deal with Japan’s Dentsu as well as Martin Sorrell’s S4 Capital.
Bolloré, who has pledged to remain chair and chief of Havas until 2035, said it was his duty to maximise value for all stakeholders. “By nature, I never say no to any opportunities. But I think the most likely scenario is that we will continue as it is and will continue, I hope, to overperform the market.”
Bolloré said that talk of mergers had continued throughout the decade he had run Havas, adding: “Six players in the industry . . . it’s already very concentrated.”
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