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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-41189
TRUE NORTH COMMUNICATIONS INC.
AND
BOZELL, JACOBS, KENYON & ECKHARDT, INC.
SUPPLEMENT NO. 2 TO JOINT PROXY STATEMENT
AND NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
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TRUE NORTH COMMUNICATIONS INC.
PROSPECTUS SUPPLEMENT NO. 2
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This Supplement No. 2 dated December 10, 1997 ("Supplement No. 2") to the
Joint Proxy Statement/Prospectus dated November 26, 1997, as previously
supplemented by a Supplement dated December 1, 1997 (collectively, the "Proxy
Statement/Prospectus"), is being furnished to the holders of Common Stock,
$.33 1/3 par value ("True North Common Stock"), of True North Communications
Inc., a Delaware corporation ("True North"), in connection with the
solicitation of proxies by the Board of Directors of True North (the "True
North Board") for use at its Special Meeting of Stockholders to be held at the
Omni Chicago Hotel, Chagall Ballroom--Third Floor--Salon A, 676 North Michigan
Avenue, Chicago, Illinois, on December 30, 1997, at 9:00 a.m., local time, and
any adjournments thereof (the "True North Special Meeting").
This Supplement No. 2 is also being furnished to the holders of Class A
Common Stock, par value $.001 per share, and Class B Common Stock, par value
$.001 per share, of Bozell, Jacobs, Kenyon & Eckhardt, Inc., a Delaware
corporation ("Bozell"), in connection with the solicitation of proxies by the
Board of Directors of Bozell for use at its Special Meeting of Stockholders to
be held in the Second Floor Staircase Room at Bozell's offices at 40 West 23rd
Street, New York, New York, on December 30, 1997, at 10:00 a.m., New York
time, and any adjournments thereof (the "Bozell Special Meeting").
TRUE NORTH AND BOZELL STOCKHOLDERS SHOULD CONSIDER THE INFORMATION CONTAINED
HEREIN TOGETHER WITH THE INFORMATION CONTAINED IN THE PROXY
STATEMENT/PROSPECTUS BEFORE VOTING ON THE MATTERS TO BE PRESENTED AT THE TRUE
NORTH SPECIAL MEETING OR THE BOZELL SPECIAL MEETING, AS THE CASE MAY BE.
PLEASE CONTACT DALE F. PERONA, SECRETARY, TRUE NORTH COMMUNICATIONS INC., 101
EAST ERIE STREET, CHICAGO, ILLINOIS 60611 (TELEPHONE NUMBER (312) 425-6500),
IF YOU WOULD LIKE TO RECEIVE AN ADDITIONAL COPY OF THE PROXY
STATEMENT/PROSPECTUS. THIS SUPPLEMENT NO. 2 IS BEING DELIVERED TO EACH TRUE
NORTH AND BOZELL STOCKHOLDER ENTITLED TO RECEIVE NOTICE OF AND TO VOTE AT THE
TRUE NORTH SPECIAL MEETING OR THE BOZELL SPECIAL MEETING, AS THE CASE MAY BE.
Capitalized terms in this Supplement No. 2 that are not defined herein shall
have the meanings ascribed to them in the Proxy Statement/Prospectus. This
Supplement No. 2 supersedes the Proxy Statement/Prospectus to the extent that
this Supplement No. 2 is inconsistent therewith.
RECENT DEVELOPMENTS
On December 3, 1997, True North filed an answer to the complaint (the
"Publicis Complaint") filed by Publicis Communication ("Publicis") in the
United States District Court for the Northern District of Illinois (Civil No.
97C8263) against True North and the members of the True North Board, other
than the Publicis Designee (the "Publicis Litigation"). In addition, True
North filed a counterclaim (the "Counterclaim") against Publicis, Publicis
S.A. and Maurice Levy, the President and Chief Executive Officer of Publicis
S.A. The Counterclaim alleges that Publicis S.A.'s publication of its November
10, 1997 letter to True North and Publicis S.A.'s related comments are false
and misleading in violation of the federal proxy rules. The Counterclaim
states,
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among other things: "Publicis' supposed proposal to acquire True North is
nothing more than a ruse designed to interfere with the proposed Bozell
acquisition and to mislead True North's shareholders. Publicis has indicated
. . . that the "combination' Publicis referred to in the November 10, 1997
letter was in actuality an acquisition of Publicis by True North."
The Counterclaim also alleges that Publicis, Publicis S.A. and Mr. Levy
tortiously interfered with the exercise by certain of True North's directors
of their fiduciary duties; breached the May 1997 definitive agreements whereby
True North and Publicis separated their respective worldwide agency networks
(the "Settlement Agreements"); and tortiously interfered with the current and
expected business relationship between True North and Bozell. The Counterclaim
states: "Though Publicis has publicly stated that it is opposing the True
North-Bozell transaction in the interests of shareholder value, its actions
have not been consistent with the best interests of an open shareholder vote.
Its real intention is to block the True North-Bozell transaction by any means
. . ." The Counterclaim seeks an order for corrective disclosures, injunctive
relief, compensatory and punitive damages and reimbursement of court costs and
attorney's fees.
On December 3, 1997, True North commenced international arbitration
proceedings against Publicis and Publicis S.A. pursuant to certain of the
Settlement Agreements for alleged violations of their contractual obligations
to True North thereunder.
On December 4, 1997, Mr. Levy sent to the True North Board and publicly
released an unsolicited letter announcing the intention of Publicis S.A.
and/or Publicis to commence a tender offer to purchase 9,619,904 shares of
True North Common Stock (or such greater number of shares which, when added to
shares beneficially owned by Publicis and its affiliates, would constitute a
majority of the total number of shares of True North Common Stock outstanding
on a fully diluted basis) at a price per share of $28.00 (the "Offer").
Publicis has further indicated that the Offer is a "first step" in effecting a
combination of Publicis and Publicis Worldwide, an affiliate of Publicis, with
and into True North in exchange for the issuance of additional shares of True
North stock to Publicis. Although Publicis has stated that it intends that
each share of True North Common Stock thereafter remaining outstanding would
have an estimated post-combination value of $28.00, the number of shares that
would be issued to Publicis in the "second step" has not been disclosed. The
text of Mr. Levy's letter is as follows:
Board of Directors
True North Communications Inc.
101 East Erie Street
Chicago, Illinois 60611
USA
Members of the Board:
As you know, on November 10, 1997, I wrote to you to propose a business
combination between Publicis and True North in which each outstanding share
of True North would be valued at $28. We were therefore disappointed when
True North notified us on November 17 that the Board had declined Publicis'
invitation to discuss the transaction.
Since that date, True North's Proxy Statement/Prospectus with respect to
the pending merger with Bozell has been made public. The information set
forth in that document confirms our strong conviction that the Bozell
transaction is contrary to the interests of True North's stockholders.
Publicis' view that the Bozell merger does nothing to address True North's
strategic imperatives has only been compounded by your recent disclosure of
the financial aspects of the Bozell deal. Not only does the acquisition
magnify True North's international weaknesses, but it does so at a price
that is far in excess of any reasonable valuations of Bozell's businesses.
After an intensive review of True North, we have concluded that the
financial and strategic imperatives of combining our two companies are too
compelling to ignore. Accordingly, I am writing to inform you of
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Publicis' intention to commence an all-cash tender offer for 9,619,904
shares of True North stock at a price of $28 per share. We believe that
this represents an exceptionally attractive opportunity for your share
owners--specifically, our all-cash offer represents a 20% premium over the
price of the True North stock on the day prior the announcement of our $28
proposal.
After consummation of the tender offer, Publicis and its affiliates would
be the beneficial owners of a majority of the issued and outstanding True
North shares. Publicis would then consummate a business combination with
True North in which Publicis' worldwide advertising network would be
combined with True North's.
In the combination of our two businesses, True North would become the
owner of all of Publicis' advertising-related assets and the proposed
transaction would effectively consolidate the True North and Publicis
agency networks under True North's control. Following consummation of those
transactions, the True North common stock would continue to be outstanding
and listed on the New York Stock Exchange. In exchange for the transfer of
Publicis' businesses to True North, True North would issue to Publicis
additional shares. In the proposed transaction, Publicis' businesses would
be transferred to True North at a valuation for such businesses which would
yield an estimated post-transaction value of $28 per True North share.
The transaction we propose represents a unique opportunity to build a
combined enterprise capable of delivering the worldwide services that
today's global marketers demand. Together, our businesses would have annual
revenue of over $1.2 billion and would have operations in 77 countries
around the world. The fit between our two companies is perfect, and we at
Publicis have nothing but the highest respect for the senior agency
personnel and other creative staff at the True North agencies, the vast
majority of whom we intend to retain following consummation of the
transaction.
Our offer is not subject to any financing contingencies. The offer is, of
course, subject to the termination of the Bozell Merger Agreement in
accordance with its terms. Publicis intends to solicit proxies against the
Bozell merger and has today filed with the SEC preliminary proxy materials
in opposition to your pending transaction. We are committed to maximizing
the value of the stockholders' investment in True North. Therefore, even if
you refuse to consider our offer, we intend to demand that the Board
solicit competing proposals for the sale of True North. Publicis is
prepared to participate in such an auction by making an offer for the
Company at least equal in value to our current proposal. If a competing
bidder makes an offer for True North at better terms than those of our
final bid, Publicis intends to support such an offer.
We are convinced that a merger of Publicis' and True North's businesses
makes compelling strategic and financial sense for both our companies and
our respective stockholders, clients and employees. We are willing to
negotiate an agreement and as I have previously indicated, I am ready to
meet with you at any time to present our plans and to discuss all aspects
of our proposal.
Sincerely,
Maurice Levy
On December 4, 1997, Publicis Communication filed a supplemental and amended
complaint (the "Amended Complaint") in the Publicis Litigation. The Amended
Complaint asserts, among other things, misrepresentations and omissions in
True North's proxy materials. The Amended Complaint also seeks to force True
North to redeem its Rights Agreement or to amend the Rights Agreement so that
it is not triggered by the Offer.
The Amended Complaint alleges, among other things, that the Proxy
Statement/Prospectus does not provide any information about certain offers
received or combinations discussed that would allow True North
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stockholders to compare the Publicis proposals and the Bozell Merger with
prior offers or proposed combinations. The Amended Complaint also alleges that
the Proxy Statement/Prospectus suggests that the Other Interested Party's
proposed transaction was of less value to True North stockholders than the
Bozell Merger by stating that the closing price of True North Common Stock on
November 25, 1997, the day before the date of the Proxy Statement/Prospectus,
was above the Other Interested Party's final tentative offering price but
failing to disclose to True North stockholders that "the price on November 25,
1997 reflected the $2.63 jump in True North's share value on November 17,
1997, when Publicis disclosed its proposed offer." True North supplementally
discloses (i) that its stock price traded above the final tentative offering
price of the Other Interested Party for brief periods after the announcement
of the Bozell Merger and before November 17, 1997 and closed above such price
on the New York Stock Exchange on November 25, 1997 and (ii) that from and
after November 17, 1997, the prices at which True North Common Stock has
traded may have been influenced by the disclosure by Publicis of its proposed
offer on November 17, 1997.
The Amended Complaint further alleges that a letter dated December 2, 1997
directed to True North stockholders who are also True North employees
"erroneously states that "Publicis withh[eld] some obligatory financial
documentation [from True North],' and blames Publicis for causing an alleged
delay in obtaining SEC approval of True North's proxy solicitation materials."
According to the Amended Complaint, (i) True North did not ask Publicis for
"financial documentation," such as financial statements, but for a statement
from its accountants as to which standards had been applied to certain
financial statements of Publicis, and (ii) Publicis did not withhold anything,
but requested its accountants to comply. The Amended Complaint also alleges
that any delay in the Securities and Exchange Commission declaring True
North's proxy materials effective was not caused by Publicis' provision of the
accountants' statements requested by True North.
Finally, the Amended Complaint alleges that True North has tried to mislead
its stockholders into believing that the results of the proxy solicitation,
and the Bozell Merger, are a forgone conclusion. In particular, the Amended
Complaint complains of statements allegedly made by Bruce Mason, Chairman and
Chief Executive Officer of True North, on the CNBC network's "Power Lunch"
program to the effect that True North expected the Merger to be completed by
December 31, 1997 (which would be possible only if True North stockholders
were to approve the Merger at the Special Meeting) and in an interview to the
Paris daily newspaper Le Figaro, in which Mr. Mason allegedly predicted that
the Merger was a near certainty, stating that True North and Bozell "are going
to constitute" a very powerful combination.
On December 4, 1997, the True North Board met to discuss the Offer and
related matters raised in Mr. Levy's December 4, 1997 letter. Also present at
the meeting were True North's legal counsel, Sidley & Austin, and True North's
financial advisor, Morgan Stanley. At this meeting, the True North Board
preliminarily considered the Offer. Following the meeting, True North sent a
letter to its stockholders dated December 5, 1997 informing them of the Offer
and stating that the True North Board would report its recommendations with
respect to the Offer at the earliest practicable time.
On December 5, 1997, True North filed an emergency motion for preliminary
injunctive relief in the Publicis Litigation to enjoin Publicis from engaging
in conduct that is not in support of the Bozell Merger. Hearings were held on
December 5 and December 8, 1997 on this motion.
On December 7, 1997, the True North Board met again to consider the Offer
and related matters raised in Mr. Levy's December 4, 1997 letter. At this
meeting, the True North Board unanimously (with the Publicis Designee recusing
himself) determined that the Offer is inadequate and not in the best interests
of True North and its stockholders. In reaching this conclusion, the True
North Board took into account a variety of factors, including, among others,
the factors set forth below:
(i) The opinion of its financial advisor, Morgan Stanley, that the Offer
is inadequate from a financial point of view;
(ii) The belief of the True North Board that the pending Merger with
Bozell will yield more value to stockholders and will allow True North to
realize its long-standing strategic vision of having a multi-brand agency
holding company;
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(iii) The belief of the True North Board that even without taking into
account the pending Merger with Bozell, the proper takeover premium for
True North would yield significantly more than $28.00 per share;
(iv) The belief of the True North Board that the "blended value" of the
Offer (taking into account the "second step") will likely be less than
$28.00;
(v) The proposed combination of True North and Publicis ignores a decade-
long history of incompatibility between the two companies;
(vi) The Offer would cause True North's public stockholders to become
minority owners of a subsidiary of a non-U.S. company, which would likely
make True North stock less attractive to investors;
(vii) The Offer is conditional, not certain, and as Publicis has stated,
there is "no assurance" that the Offer will be completed even if the Bozell
Merger is terminated; and
(viii) As fiduciaries, the True North Board has grave concerns about
delivering control of True North to Publicis.
On December 8, 1997, Mr. Levy sent a letter to the True North Board in
which, among other things, Publicis requested that a special committee of
independent directors of True North be appointed and vested with the authority
to negotiate with Publicis with respect to all aspects of the Offer or with
"any other serious bidder."
On December 9, 1997, Mr. Levy sent a letter to the True North Board in
which, among other things, he reiterated Publicis' objections to the Bozell
Merger and its willingness to negotiate all aspects of the Offer.
On December 10, 1997, the U.S. District Court for the Northern District of
Illinois, presiding over the Publicis Litigation, ruled in favor of True
North's emergency motion for preliminary injunctive relief upon a finding that
the Settlement Agreements between True North and Publicis prohibit certain
actions that Publicis has taken in recent weeks, including its announcement of
its intention to make the Offer and its solicitation of revocations and
conditional proxies. Accordingly, the Court preliminarily enjoined Publicis,
Publicis S.A., Mr. Levy and their respective officers, agents and employees
from announcing, commencing or further proceeding with any tender offer for
True North Common Stock; soliciting, contacting or otherwise communicating in
any way with any record or beneficial holder of True North Common Stock, by
means of soliciting proxies or otherwise, to influence stockholder voting with
respect to the Bozell Merger; or inducing, assisting or encouraging third
parties to take actions in opposition to the Bozell Merger.
On December 10, 1997, True North sent a letter to Mr. Levy which, among
other things, informed Mr. Levy of the True North Board's determination that
the Offer is not in the best interests of True North and its stockholders (if
the Offer were even allowed to be made) and the reasons for that
determination.
ADDITIONAL INFORMATION CONCERNING THE SOLICITATION
OF PROXIES BY TRUE NORTH FOR THE TRUE NORTH SPECIAL MEETING
The solicitation of proxies for the True North Special Meeting pursuant to
the Proxy Statement/Prospectus is being made by the True North Board. All
expenses incurred in connection with the solicitation of proxies by or on
behalf of the True North Board will be borne by True North, except that all
printing expenses and Securities and Exchange Commission filing fees will be
divided equally between True North and Bozell. In addition to the use of the
mails, proxies may be solicited personally or by telephone, facsimile
transmissions or otherwise by directors or executive officers of True North
who will not be additionally compensated for such solicitations, but may be
reimbursed for their out-of-pocket expenses incurred in connection therewith.
True North has retained D.F. King & Co., Inc. to aid in the solicitation of
proxies from its stockholders. The fees of such firm are estimated to be
$150,000, plus reimbursement of out-of-pocket expenses, in the event of a
solicitation in opposition to the Merger or related matters. Such firm
estimates that it may engage as many as 45 persons in its solicitation
efforts. True North will also arrange with brokerage houses and other
custodians, nominees and fiduciaries for forwarding solicitation materials to
the beneficial owners of shares of True North Common Stock held of record by
such persons. True North will reimburse such persons for the reasonable out-
of-pocket expenses incurred in connection therewith.
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