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Pending Business Combination
3 Months Ended
Mar. 31, 2014
Pending Business Combination [Abstract]  
Pending Business Combination
Pending Business Combination
On July 27, 2013, the Company and Publicis Groupe S.A. (“Publicis”) entered into a Business Combination Agreement (the “Business Combination Agreement”) pursuant to which the Company and Publicis agreed, subject to the terms and conditions of the Business Combination Agreement, to combine their respective businesses (the “Business Combination”). In the Business Combination, Publicis will merge (the “Publicis Merger”) with and into Publicis Omnicom Group N.V., a newly-formed Dutch holding company (“Publicis Omnicom Group” or “HoldCo”), with Publicis Omnicom Group being the surviving entity in the Publicis Merger, and immediately after consummation of the Publicis Merger, a corporation wholly-owned by Publicis Omnicom Group will merge (the “Omnicom Merger” and together with the Publicis Merger, the “Mergers”) with and into the Company, with the Company being the surviving corporation in the Omnicom Merger.

In the Publicis Merger, each issued and outstanding share of Publicis will be exchanged for 1.000000 ordinary share of Publicis Omnicom Group. In addition, prior to completion of the Publicis Merger, Publicis intends to declare and pay a special dividend, in cash, in an amount equal to €1.00 per Publicis share (the “Publicis Transaction Dividend”). In the Omnicom Merger, each share of common stock of the Company will be converted into the right to receive 0.813008 of a Publicis Omnicom Group ordinary share, together with cash in lieu of fractional shares, subject to adjustment to account for certain changes in outstanding shares and certain excluded asset values as set forth in the Business Combination Agreement. Similarly, prior to completion of the Omnicom Merger, the Company intends to declare and pay a special cash dividend of $2.00 per share of the Company’s outstanding common stock (the “Omnicom Transaction Dividend” and, together with the Publicis Transaction Dividend, the “Transaction Dividends”), subject to adjustment to account for certain changes in outstanding shares of the parties and certain excluded asset values, in each case as set forth in the Business Combination Agreement, and, if necessary, to equalize the cumulative amount of regular dividends paid by the Company after July 27, 2013 with the cumulative amount of regular Publicis dividends paid after July 27, 2013. However, dividends of up to $0.80 per share in the aggregate paid to holders of the Company's common stock in respect of record dates after July 27, 2013 and before the Mergers are not included in this equalization. The payment of the Transaction Dividends is also subject to applicable law.

Completion of the transactions contemplated by the Business Combination Agreement (which include the Mergers, the Publicis Transaction Dividend, and the Omnicom Transaction Dividend, collectively, the “Transactions”) will require resolution of all open issues, complexities and challenges and will be subject to the satisfaction or waiver, if legally permitted, of certain conditions including (a) approval and adoption of the Business Combination Agreement and the Omnicom Merger by the holders of two-thirds of the outstanding shares of common stock of the Company, approval of the Cross-Border Merger Terms (as described in the Business Combination Agreement), and the Publicis Merger by the holders of two-thirds of the voting rights attached to the Publicis shares present at a meeting of the Publicis shareholders, and the approval of the Publicis Transaction Dividend by the holders of a majority of the voting rights attached to the Publicis shares present at a meeting of the Publicis shareholders; (b) approval by requisite governmental regulators and authorities, including approvals under applicable competition laws; (c) the listing of the Publicis Omnicom Group ordinary shares on applicable stock exchanges; (d) the absence of any law or order prohibiting the completion of the Transactions; (e) the performance and compliance in all material respects by HoldCo and the other parties with all obligations under the Business Combination Agreement; and (f) the absence of a material adverse effect on either the Company or Publicis.

In connection with pending merger control approval in China, effective April 17, 2014 the parties are entering an extended review period (Phase III).
In addition, the parties have made applications with various tax authorities for the purpose of establishing the intended tax treatment for Publicis Omnicom Group. To date, the parties’ applications have not yet resulted in the requisite agreements, rulings or acknowledgements from the relevant tax authorities. The parties have jointly applied to the Dutch Ministry of Finance and the United Kingdom's HM Revenue & Customs to establish exclusive tax residency in the United Kingdom for Publicis Omnicom Group under the mutual agreement procedure (“MAP”) pursuant to the United Kingdom/Netherlands double tax agreement. To date, the parties’ application has not resulted in the agreement of the competent authorities that is required to establish such exclusive tax residency. The ultimate failure to obtain the agreements, rulings or acknowledgments of the various tax authorities, including the inability to establish exclusive United Kingdom tax residency and any conditions established by the competent authorities under a MAP, may adversely affect the tax treatment and the expected benefits of the proposed combination and also could adversely affect the likelihood of satisfying certain of the conditions necessary to complete the combination under the Business Combination Agreement.

It is not practicable at this time to predict the exact timing of when completion of the Transactions may occur. Upon completion, the Transactions contemplated by the Business Combination Agreement would have a material effect on our future results of operations and financial position.