What does the future hold for Havas as wily Bolloré plays the long, long game?

Analysts have long grumbled about Havas’ status, saying that it’s too small to survive on its own, and that it should merge with another group. (Aegis was a favourite, although that s now all but impossible since the latter was taken over by Dentsu last year.)

Yet this impression is a little unfair, and almost certainly incorrect. Havas has around 15,000 employees worldwide, has revenues approaching two billion euros a year, and has many famous agencies – Havas Worldwide, Arnold and media giant Havas Media to name but three – under its wing. Its client book includes Sony, IBM, Durex, Virgin Mobile, Pernod Ricard and Evian. And it is the world’s sixth-biggest marcomms group.

It’s also interesting because, like Publicis and Sir Martin Sorrell’s WPP, it is a group very much associated with one man; in this case, the buccaneering Vincent Bolloré, an old-style tycoon with an eye for corporate raiding and daring takeovers.

He and his family-owned company Bolloré Groupe now own almost 40 per cent of Havas shares, and he pulled off an amazing coup last month when he used his contacts and his power (he is also chairman of the French mega-media conglomerate Vivendi, and O2 owner Telefonica’s chairman Cesar Alierta is a very good friend of M. Bolloré, so draw your own conclusions) to wrest the enormous (€500m) global O2 media account from ZenithOptimedia to Havas Worldwide. ZenithOptimedia is owned by Publicis, which is of course run by his great rival Levy, and that must have hurt.

But more interesting, from an M&A point of view, is what’s been going on behind the scenes at Havas over the past few weeks. Back in January, Bolloré’s son Yannick took over the helm of Havas from long-standing boss David Jones.

This activity – installing a family member, building up share ownership to (at time of writing) 36.2 per cent – seems to indicate a revitalised interest in the business of advertising by Bolloré pere. Bolloré Groupe is a classic diversified conglomerate, with interests in everything from media and wine through to agriculture and car batteries, and M Bolloré is rumoured to have tried offloading his Havas stake a number of times – but has either never found a buyer, or one willing to pay the price he wanted.

Yet the wily 62-year-old billionaire seems to have spotted an opportunity. Despite Havas doing well, it is still a target for a takeover by a bigger group. Many analysts remain sceptical about its ability to respond to a changing world, and are troubled by its regional (largely European) focus.

“It is a strategic disadvantage to be small and local when you have to respond quickly and develop critical mass in the fast-changing world of digital advertising,” Claudio Aspesi, media analyst at Bernstein, told the Financial Times.

Havas may turn out to be the most valuable and stable part of the Bolloré empire, which does a lot of business in Africa. However, it could be devastated if the terrible Ebola epidemic in the western part of the continent gets any worse. About half (€6.5bn) of the entire Bolloré Groupe’s €10.9bn revenues last year came from transport and logistics, most of it in Africa. Indeed, shares in the Groupe have lost about 20 per cent of their value since September, as investors got the jitters about the future of the business.

Building up a further interest in the advertising firm that he has dominated for nigh on a decade makes perfect sense – it reduces the wider group's exposure to events outside its control, and gives it a bigger stake in a potentially very valuable property. (Although it’s worth pointing out that Sir Martin Sorrell, in his role as industry sage, expressed his concerns that both Ebola and Isis’ reign of terror in the Middle East could have an adverse effect on ad spending).

And Havas is (leaving aside regulatory considerations aside), to a WPP, Publicis, Omnicom, IPG or Dentsu, a very nice prize indeed. Here, its comparatively small size works in its favour. Since the doomed Publicis-Omnicom merger was called off, mega-mergers or takeover deals have fallen out of favour. They’re now, it seems, deemed too unwieldy, and too costly; and post “Publicom”, many wonder whether or not they actually add any value to shareholders, or anyone else.

But Havas, with its tight focus on doing one thing, marcomms – and on recent evidence, doing it quite well – and its size makes it an attractive M&A target. Especially since the amazing Publicis-Sapient deal of last week.

Getting more involved with Havas would also reduce the Bolloré Groupe’s overexposure in certain volatile markets.

And here’s the really intriguing bit: just a fortnight ago, Bolloré's chief finance officer Cédric de Bailliencourt indicated his company’s desire to acquire more Havas shares, taking its stake up to 50 per cent.

Bailliencourt also said that there were no plans to increase the stake beyond 50 per cent or so, adding that the company wanted Havas to remain listed. This points to a fascinating scenario: that Bolloré and son take control of Havas, fatten it up (Bolloré fils said back in April that he was looking at making “between four to six” acquisitions to grow the agency organically) and selling it at a fat profit to either a bigger group, or a private equity investor. And there’s yet another possibility… Havas doesn’t have to stay at its current size. Remember I said earlier that the senior Bolloré was also chairman of Vivendi?

A combined Vivendi-Havas isn’t beyond the realms of possibility, and would solve analysts’ complaints that Havas is just too small…

Apparently there is a Bolloré Groupe shareholders’ meeting at the end of the month to vote on a number of issues. I would love to be a fly on the wall for that one…

Andrew Moss is a partner at Green Square, corporate finance advisors to the media and marketing sector.