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Market Update

Publicis and Omnicom to Merge, Saks Agrees to $2.4 Billion Deal

Author: Nichole Harper
Last Update: 2:25 PM ET July 29 2013

2:20 PM New York Ė U.S. market indexes were on the decline and index of pending existing home sales fell from a seven year high. Banks and financial stocks gained. On merger Monday, Saks agreed to a $2.4 billion deal. Two advertising giants, France based Publicis and New York based Omnicom agreed to merge.

U.S. stocks declined on the first day of trading and fewer Americans signed contracts in June to purchase previously owned homes.

The index of pending home sales declined 0.4% to 110.90 in June from the record high in May since December 2006, the National Association of Realtors said today in Washington.

Investors stayed on the sidelines ahead of global earnings reports and the release of monthly U.S. gross domestic product and monthly labor statistics. In addition, Fed and the European Central Bank are scheduled to make policy announcements.

More than 130 companies are scheduled to release earnings in the U.S. this week and at least 80 companies are scheduled to release earnings in the euro zone and 650 companies are expected to release earnings in Japan.

In New York trading, the S&P 500 index declined 0.4% and the narrow index of 30 large stocks fell 0.3%. The tech heavy Nasdaq Composite Index declined 0.4%.

Saks Agreed to $2.4 Billion Deal

Saks Inc (SKS) agreed to be acquired by Canada based Hudsonís Bay Company for about $2.4 billion in cash. The company will be merged with Lord & Taylor and other chain Hudsonís Bay.

Including the debt, the deal is worth $2.9 billion.

The company agreed to pay $16 a share, 4.5% higher than its closing price on Friday and nearly 30% more than its closing price on May 20 when first report of a possible deal emerged.

The merged retailer will have 320 store locations and would have generated $7 billion in revenues in 2012.

Hudsonís Bay plans to finance the deal with the help of $1 billion in new stocks and $400 million in new bonds and the rest will be financed by borrowing $1.8 billion of new loans and cash on hand.

Publicis and Omnicom to Merge

Publicis Groupe SA, the France based communication group merged with the U.S. based Omnicom Group Inc. and the merged company in 2012 would have had $22.7 billion or Ä17.7 billion in revenues.

Publicis Omnicom Group will have a combined equity market capitalization of nearly $35.1 billion or Ä26.5 billion with. The merged group will have more than 130,000 employees.

Publicis Groupe shareholders will receive one new share of the new entity for each share held and a special dividend of Ä1 a share.

Omnicom shareholders will receive 0.813 new issued ordinary shares of new company for each share of Omnicom and a special dividend of $2 a share.

The deal is expected to face anti-trust scrutiny in the U.S. and also French regulators are likely to demand stringent job conditions in France.

Indexes in Europe closed higher.

In London, FTSE 100 index gained 0.1% and in Frankfurt DAX index gained 0.2% and in Paris CAC 40 added 0.1%.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc