Investigation into Publicis Sapient deal underway

Pippa Chambers
By Pippa Chambers | 5 November 2014

A US law firm is conducting an investigation into the proposed buyout of marketing and consulting company Sapient, by global ad powerhouse the Publicis Groupe.

Securities litigation law firm of Brower Piven, has commenced an inquiry into “possible breaches of fiduciary duty and other violations of state law” by the board of directors of Sapient Corp.

What AdNews understand this to mean is that the securities investigation firm has launched a class action against the directors of Sapient on behalf of some of the shareholders of Sapient.

The buyout share price is $25, a lot more than the $16-18 share price the company has been trading at for a long time. Therefore, it's unlikely this firm is alleging Sapient did not get a good price just in general, but rather that there were or could have been other offers from companies other than Publicis which were more than $25 a share. Or, perhaps that shareholders thought the company had more value if it didn't merge.

On Monday Sapient and Publicis Groupe announced the signing of a definitive agreement to acquire Sapient in a $3.7 billion deal. It includes SapientNitro, DigitasLBi, Sapient Global Markets, Sapient Government Services, and Rosetta. Under the terms of the transaction, Sapient shareholders are anticipated to receive $25 in cash for each share of Sapient common stock they own.

Brower said the transaction is expected to close in the first quarter of 2015, though Sapient shareholders will most likely be asked to vote on the deal well before that time.

In a shareholder alert from Brower Piven, it said: “The firm’s investigation seeks to determine, among other things, whether Sapient’s board of directors failed to satisfy their duties to the company’s shareholders, including whether the board adequately pursued alternatives to the acquisition and whether the board obtained the best price possible for the company’s shares of common stock.”

It urges those who currently own common stock of Sapient who would like to learn more on the investigation being conducted to get in touch.

As a result of the agreement, Publicis.Sapient will be Publicis Groupe’s newly created platform focused exclusively on digital transformation at the convergence of communication, marketing, commerce and technology.

In a press release from Sapient on Monday it said: “The agreement has been approved unanimously by the management and supervisory boards of Publicis Groupe and the board of directors of Sapient.”

The Sapient deal comes seven months after the crumbling of Publicis Groupe's bid to ramp up its US presence via a merger with Omnicom.

Publicis anticipates NASDAQ-listed Sapient to be the “jewel in the crown” of the group, and said it will accelerate its growth profile and create cost synergies of €50 million. At its results presentation last week Publicis said that the failed merger with Omnicom had distracted the French company from driving growth.

Publicis claims the acquisition will make the group the world's “leading global communication, marketing, omni-channel commerce and technology group” with combined revenue in excess of €8 billion, combined EBITDA of approximately €1.3 billion. It will count 75,000 staff worldwide.

For more news:

Did Publicis Groupe overpay for Sapient?
Former SapientNitro boss Paul Bennett switches to client side
Sapient becomes $3.7bn 'jewel in Publicis' crown'

Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop me a line at pippachambers@yaffa.com.au

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