TN Mustering Its Defenses

Lawyers for True North Communications and Publicis S.A. were in U.S. District Court here Friday, each seeking injunctions against the other’s actions. It’s a scenario likely to be continually repeated in the coming weeks.
Early last week, TN may have thought it had called Publicis’ bluff, answering the French firm’s lawsuit seeking an injunction against the Bozell merger vote with a countersuit. In part, TN dismissed Publicis’ complaint that its stock would be diluted by the Bozell deal by saying, “Publicis Communication has the right to buy additional shares of True North common stock” to bolster its ownership.
In boldly opting to exercise that right, Publicis chairman Maurice Lƒvy not only met TN’s raised bet, but increased it yet again, answering with his intention to commence this week an all-cash tender offer for 9.6 million shares at $28 per share.
Publicis’ bid is contingent on the failure of TN’s merger with Bozell. TN chairman Bruce Mason sent a letter to shareholders Friday, assuring them that the Dec. 30 meeting to approve the Bozell deal remains scheduled and urging them “not to act hastily with respect to your investments” in TN until its board meets. The letter also urges shareholders not to sign the forms Publicis is sending them as it solicits proxies to vote down the merger.
Mason and chief financial officer Don Seeley will hold meetings with TN staffers beginning today in Chicago. The agency said these meetings had been planned before the tender offer, but, clearly, TN’s first response must be to seek support from the past and present employees who hold 20 percent of its stock. Publicis hopes to tap and expand lingering pockets of TN opposition to the Bozell marriage.
Beyond that, TN’s next lines of defense include the “poison pill” anti-takeover provisions in its charter, and, of course, the courts.