The Financial Times got everyone excited Friday with an anonymous source who said Publicis Groupe was considering a takeover of Interpublic Group. On Sunday, however, Publicis denied it was interested in IPG, and FT's Alphaville blog apologized for causing a fuss.
This morning, a Business Insider reader who is obviously a close observer of the situation posited this alternative interpretation of events, via an email: That Publicis may indeed still be interested in an IPG takeout and that the French agency holding company's denial left it enough wiggle room to continue its bid without seeing its own stock get flattened (and that of IPG become too expensive) before the move becomes public. Here's the theory:
The original report on FT Alphaville didn't say the two companies were in discussion. And that seems to be what Publicis denied.
My read of the initial rumor was that Publicis had a serious internal debate over 6 months whether or not they should pursue IPG. After determining that they would, they had banks do some work on the logistics of the deal. Nowhere did Alphaville say that Publicis had made a formal offer or even began discussing a deal with IPG. Similarly, Alphaville never said that banks were hired to facilitate the interaction with IPG. It simply said that Publicis was planning to buy IPG and that banks were exploring ways to finance the deal.
I read into your follow up article and I sense that you are skeptical of the Publicis denial as well. Publicis literally did not deny a single aspect of the original report. They denied two things that were never reported.
My theory--Publicis doesn't want IPG stock to trade up to 12-13 and their own stock to trade down 5-10% prior to formally making an offer because it will drastically reduce the premium. $15 per share in cash/stock looks a lot different when IPG is trading at 9 and Publicis is trading at 39 than if IPG is at $13 and Publicis is at $35.
I'll add one more piece of chaff to the rumor mill: IPG closed at $9.67 on Thursday before popping to $11+ on Friday, when the FT note came out. Today, it's settled back, but only to $10.14.
In other words, it's still trading about 5% above where it was before the takeover rumor went public.
Could it be that some investors think that IPG remains in play? (The obvious caveat: Publicis' stock is also up today, suggesting its investors believe it won't go for IPG.)
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