Aegis Group more vulnerable while it has no chief executive

The future ownership of Aegis is decidedly less clear following last week's shock departure of chief executive Robert Lerwill.

The 56-year-old had presided over four successive years of above market growth since taking the helm in February 2005, but his exit, according to sources, was far from planned.

Rumours abound about "fundamental differences" between Lerwill and the group's chairman of five months John Napier, but neither was available for further comment after praising the current management team in a joint statement last week.

What is clear is that Aegis, which owns media agencies Vizeum and Carat, digital network Isobar and research company Synovate, has no immediate plan to find a new chief executive. Napier, a former chief executive of recruitment firm Hays and chairman of the Royal SunAlliance Group, will assume day-to-day responsibilities.

"I was surprised and disappointed to learn of Robert's sudden exit," said Robert Willott, editor of Marketing Services Financial Intelligence. "It worries me that the person now taking charge has little notable media experience," he added.

One of Lerwill's most public tasks during his tenure was to oppose five attempts by majority stakeholder Vincent Bollore, chairman of rival group Havas, to secure two seats on the company's board. Bollore, who holds a 29.9% stake in Aegis, has expressed an interest in buying Aegis in the past and is now expected to resume these efforts.

Dominic Buch, media analyst at Numis, said such talk has helped buoy Aegis' share price over the past two years. In 2008, the value of the average media asset in the UK has fallen by 60%. Aegis' share price remained largely steady until September, but since then has fallen to historic lows below 50p.

The group has consistently argued that Bollore's 32.9% stake in Havas creates a conflict of interest and its board has largely followed the party line and rejected his advances.

But there is a growing sense this hard-line position may be about to soften in 2009. A friend and long-time associate of Lerwill believes Bollore is still trying to win support behind the scenes and suggests Napier might be ready to reconsider the group's position.

Aegis' share price rocketed nearly 20% following Lerwill's departure, leading Buch to note: "A company without a chief executive is always more vulnerable to a takeover."

He added a merger between Aegis and Havas could make commercial sense in a tough 2009, reducing back-end costs while playing to the strengths of complementary assets.

PEAKS AND TROUGHS: AEGIS' SHARE PRICE

- 7 February: 116p

Aegis Group shares jump after it emerges that Havas chairman Vincent Bollore is planning a bid for the company

- 9 May: 129.75p

Mainardo de Nardis quits as global chief executive of Aegis Media

- 23 May: 124.75p

Aegis Group shareholders reject Bollore's fifth attempt to secure representation on its board

- 5 June: 126.23p

Aegis' share price rises as Carat retains Walt Disney Studios' £100m pan-European media account

- 28 October: 87.5p

Aegis' share price sinks after it said it is no longer seeing organic growth in the UK, US and Spain

- 27 November 2008: 49.8p

Robert Lerwill steps down as chief executive of Aegis Media

- 28 November 2008: 59p

Shares rise 20% as speculation mounts that Lerwill's departure paves the way for a takeover by Bollore-backed Havas

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