PARIS — Generale des Eaux has offered $5.6 billion to buy Havas, France's biggest media company, and Havas Chief Executive Pierre Dauzier has been replaced.
Generale des Eaux, a water and sewerage utility placing increased emphasis on communications, said it would move quickly to cut costs at Havas, the main shareholder of Europe's biggest pay-television company Canal Plus and publisher of weekly news magazine L'Express. Ending the 12-year tenure of Dauzier, who was often criticized for failing to create value at the company, is a positive first step, analysts said.
"If the market judges that an acceleration of Havas refocusing will rapidly lead to value-creation for Generale des Eaux shareholders, the price could remain at above 1,000 francs [about $163], implicitly valuing the bid at 530 francs per share," said Norman Allaire, an analyst at ABN Amro, in a note to investors.
Generale des Eaux said Monday it will offer stock and cash to buy the 70% of Havas it doesn't own.
The acquisition, backed by the board of Havas, will cap Chief Executive Jean-Marie Messier's two-year effort to steer the utility into the faster-growing communications business. Generale des Eaux is expected to push Havas to forge international alliances, building on links with Bertelsmann of Germany, America Online and Time Warner Inc.