This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Acquisition Of Omnicom Group Inc. By Publicis Groupe SA May Not Be In The Best Interests Of Omnicom Group Shareholders

Stocks in this article: OMC

SAN DIEGO and NEW YORK, July 30, 2013 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the acquisition of Omnicom Group Inc. (NYSE: OMC) ("Omnicom") by Publicis Groupe SA ("Publicis").  On July 28, 2013, the two companies announced a definitive merger agreement under which the two companies will combine to become Publicis Omnicom Group.  Under the terms of the agreement, Omnicom shareholders will receive 0.813 newly issued ordinary shares of Publicis Omnicom Group for each Omnicom share they own, together with a special dividend of $2.00 per share, for a total merger consideration of $69.36 per share.  The transaction is expected to close late in the fourth quarter of 2013 or the first quarter of 2014.

(Logo: http://photos.prnewswire.com/prnh/20130103/MM36754LOGO)

Is the Merger Best for Omnicom Shareholders?

Robbins Arroyo LLP's investigation focuses on whether the board of directors at Omnicom is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger.  As an initial matter, several analysts have recently set target prices above the $69.36 merger consideration.  As recently as July 10, 2013, an analyst from JP Morgan set a target price of $75 per share and an analyst from Macquarie Group also set a price of $75 per share on July 19, 2013.  In addition, an analyst from Argus Research Company set a target price of $72 on July 19, 2013.  Moreover, the $69.36 merger consideration represents a premium of only 6.5% based on Omnicom's closing price on July 26, 2013.  That premium is substantially below the average one-day premium of 51.14% for comparable transactions in the past three years.

In addition, on July 18, 2013, Omnicom released its financial results for the second quarter of 2013, reporting a 6.9% increase in diluted net income per common share to $1.09 per share from $1.02 per share compared to the second quarter 2012.  Also, Omnicom has exceeded analyst earnings per share expectations in the past nine quarters and analyst net income expectations in eight of the last nine quarters.

Given these facts, Robbins Arroyo is examining Omnicom's board of directors' decision to be merged with Publicis now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects.   

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs