Arun Sudhaman 08 May 2012 // 11:00PM GMT
LONDON--Chime Communications has revealed more details of Lord Bell's upcoming MBO, which will see Bell Pottinger-branded units depart the group.
According to an interim management statement today, "significant progress" has been made on the buyout. As forecast by the Holmes Report earlier this year, the businesses being taken private are Bell Pottinger Sans Frontières, Bell Pottinger Public Relations, Bell Pottinger Middle East, Bell Pottinger Public Affairs and Pelham Bell Pottinger.
Chime will retain a 25 percent stake in the combined entity. Terms of the transaction have been agreed, and are based on 2011 profits.
The businesses being taken private represent less than 10 percent of group profit, with another decline forecast for Chime's PR revenues and profits in 2012. According to Lord Bell, "the division is not expected to make the full year forecast."
The group's PR earnings have suffered since the termination of a key American government contract last year; unsurprisingly, the management statement notes that Chime is "pursuing a transition strategy from being a diversified group with an emphasis on public relations to being a communications and sports marketing business."
The MBO, which is being led by Lord Bell, Piers Pottinger and other Bell Pottinger directors, has attracted criticism from WPP CEO Sir Martin Sorrell. In recent months, WPP has increased its stake in Chime to over 20 percent, leading to speculation that Sorrell intends to block the buyout.
Once complete, the MBO will leave Chime with such agencies as VCCP; sports marketing firms Essentially, Fasttrack and pmplegacy; and PR agencies Good Relations and Harvard.