French Toast

Six may not be Havas’ lucky number. Still, a payoff could be on the way.

Once the Publicis-Bcom3 union is consummated this summer, Havas will rank sixth among global agency holding companies. The prevailing wisdom is that the Paris-based group, led by Alain de Pouzilhac, will be badly overmatched. With little left to buy now that talks with Cordiant Communications Group apparently fizzled a few weeks ago, most expect Havas to be mired in the doldrums, with its long-term survival in serious question.

Such analysis is fundamentally correct but perhaps a bit too gloomy. Havas may not be in the dominant role it envisioned, but de Pouzilhac can still make the best of the situation.

It’s a question of supply and demand. When the economic outlook improves and WPP, Omnicom, Interpublic and Publicis-Bcom3 get back in major acquisition mode, Havas will have much to offer. With that comes a certain leverage: Havas may be able to name its price—a position that would go some way toward helping de Pouzilhac and his cohorts salvage a measure of self-respect.

Havas’ three international networks—Arnold, Euro RSCG and Media Planning Group—generate about $2 billion in overall combined revenue. Marquee clients include Volkswagen, Audi, Volvo, Procter & Gamble, Reckitt Ben ckiser and the American Legacy Foundation. And Havas recently consolidated its operations, merging several agency holdings and adjusting staff. It now runs particularly lean and mean.

Though he would probably never admit it publicly, de Pouzilhac likely knows that a sale is all but inevit able. And he appears to be preparing for it by taking steps to maximize the com pany’s worth. The plan, says Simon Gillham, vp of communications, includes making modest acquisitions, if possible, on a “country-by-country basis” to build Media Planning Group into one of the top five global media companies; make Euro RSCG one of the three largest agency networks; and give Arnold a presence in 20 international markets.

Havas’ position will only improve if de Pouzilhac can buy at a bargain price some operations from one of the other midsized globals, such as Grey, CCG or even U.K. media outfit Aegis. Such a strategy drove the recent flirtation with CCG, sources said. With a partnership arrangement giving Publicis an option to buy Zenith Optimedia should CCG be sold, Havas was unlikely to add all of CCG’s holdings. Its goal was to pick up components cheaply (perhaps Zenith’s European operations and various Bates offices) and merge them into its networks, sources said.

Simply put, any move that bolsters Havas without swamping it with debt would help.

It will be interesting if de Pouzilhac ends up considering bids from bitter rivals Maurice Lévy or Martin Sorrell. Havas shareholders will want to get the highest price possible, and if Publicis or WPP makes the best offer, his hand may be forced.

Still, if selling is inevitable, de Pouzilhac could do worse than setting his rivals against each other and then making one of them pay a premium for the company he labored to build.