BOSTON, July 28, 2013 /PRNewswire/ -- Block & Leviton LLP ( www.blockesq.com), a Boston-based law firm representing investors nationwide, has commenced an investigation into possible breaches of fiduciary duty by the Board of Directors of Omnicom Group Inc. ("Omnicom" or the "Company") (NYSE: OMC) concerning the proposed merger of the Company with Publicis Groupe ("Publicis") in a cash and stock transaction.
Under the terms of the proposed transaction, Omnicom shareholders will receive only 0.813 newly issued ordinary shares of Publicis Omnicom Group for each Omnicom share they own, plus a special dividend of $2.00 per share, and while there may be up to two small subsequent dividends of $0.40 per share, those payments are not guaranteed. There is no price floor protecting the Omnicom shareholders' compensation. Publicis shareholders, on the other hand, will receive a full, not fractional, newly-issued ordinary share of Publicis Omnicom Group for each Publicis share they own, plus a special dividend of 1.00 euro per share.
The total enterprise value for the combined entity is estimated at approximately $35 billion. Omnicom CEO James Wren and Publicis CEO Maurice Levy are expected to be joint CEOs for up to 30 months, at which point Wren has negotiated the role of sole CEO for himself and Levy will become non-executive chairman of the board. The Company's share price has increased more than 42% since mid-November and was likely to continue its growth as a standalone company.
Block & Leviton's investigation seeks to determine, among other things, whether Omnicom's Directors breached their fiduciary duties by failing to maximize shareholder value in the proposed merger with Publicis and the overall fairness of the process by which the Omnicom Directors considered and approved the transaction.