Publicis Groupe SA announced in an official statement today that it extended Chief Executive Officer Maurice Lévys term by 18 months after more than 40 years spent in the company, highlighting its struggle to find a successor. Mr. Lévys tenure extension comes only months after plans for a $35-billion megamerger with Omnicom Group Inc. collapsed.
According to the statement of Publicis, the third-biggest ad company in the world, both Mr. Lévy and Mr. Kevin Romerts, who is a member of the management board and chief of Publicis’s Saatchi & Saatchi Worldwide division, are to leave the company in 2017.
Mr. Lévys term was prolonged despite his pledge that he would not seek a mandate extension beyond its expiration in December 2015 after leading the company for 28 years.
The succession of the Chief Executive Officer has been a tough issue as the company failed to find an appropriate person to inherit Mr. Lévys responsibilities, who had already accepted a request once by Publicis board to extend his term in 2010.
The French ad company was in advanced talks over a merger with Omnicom, but negotiations collapsed in May this year after the two companies executives clashed over the management of the combined entity. If the deal had come through, it would have created the largest advertising company in the world.
Alex DeGroote, a media analyst at Peel Hunt in London commented for Bloomberg: “If the Omnicom deal had gone ahead there would’ve been a bit more succession planning with regards to Levy’s own position. They’ve got to reinstate their story to the investment community and to their own staff and clients.”
Publicis Groupe SA added 1.05% to trade at €56.98 per share at 13:49 GMT in Paris, marking a one year change of -5.69%. The company is valued at €12.45 billion. According to the Financial Times, the 23 analysts offering 12-month price targets for Publicis Groupe SA have a median target of €67.00, with a high estimate of €75.30 and a low estimate of €55.00. The median estimate represents a 17.96% increase Fridays close at €56.80.
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