Digitas would pay termination fee of $38.9 million if deal with Publicis falls through
Digitas Inc. said today that it may be required to pay a termination fee of about $38.9 million to Publicis Groupe SA if their merger agreement falls through.
The Boston digital marketing company said in a filing with the Securities and Exchange Commission that it might also have to reimburse up to $4.6 million in fees and expenses to the French advertising company under certain circumstances.
Digitas would be required to pay the $38.9 million termination fee under various scenarios, including if the merger fails to materialize because Digitas's board of directors recommends that the company's shareholders approve another merger proposal.
Separately, Digitas said it agreed to grant its chief executive, David W. Kenny, a $1.94 million retention bonus. The company said the amount is equivalent to what Kenny would have received if his employment had been terminated in connection with a change of control of the company.
Digitas said Kenny will receive his retention bonus in three installments over a three-year period as long as he remains employed by the company.
Publicis, based in Paris, said last week that it agreed to buy Digitas in a transaction valued at $1.3 billion.
Shares of Digitas traded this afternoon at $13.43, up 7 cents, on the Nasdaq Stock Market, while American depositary receipts of Publicis traded at $41.97, up 12 cents, on the New York Stock Exchange..
(Dow Jones)
