Chime has eye on sporting glory after WPP deal

Sir Martin Sorrell: His WPP firm is part of consortium. Picture: Getty

Sir Martin Sorrell: His WPP firm is part of consortium. Picture: Getty

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PUBLIC relations firm Chime Communications said yesterday it has agreed to a £374 million takeover by Sir Martin Sorrell’s marketing and advertising giant WPP and US buyout firm Providence Equity Partners.

Chime, which owns a raft of PR agencies as well as a specialist sports marketing business called CSM, which is chaired by former Olympian Lord Coe, said the group will be sold at 365p per share.

It said the deal was a 33 per cent premium to the share price on 29 July, the day before talks over the sale were announced.

The firm, founded by PR executive Lord Bell – who advised Prime Minister Baroness Thatcher – agreed to the sale because as it shifts focus from PR to working in sports and marketing events, such as the Olympics and the World Cup, it needed a global presence. It said: “Chime views its current scale as a constraining factor on its ability to deliver growth relative to larger global competitors.”

WPP is one of the world’s biggest advertising agencies with 3,000 offices in 111 countries generating sales of £11.5 billion last year.

Providence Equity Partners has invested in more than 140 firms since founded in 1989 and has $40 billion (£26bn) worth of assets under management.

Chime chairman Lord Davies of Abersoch said: “To fulfil Chime’s considerable growth potential, significant new capital is required.

“Providence and WPP offer Chime both the capital and the industry expertise to fast-track our ambitions to build a full scale, global sports marketing and communications business.”

Chime’s existing management team is to remain with the firm. The deal is expected to be completed by the end of the year.

Simon Davies, an analyst at Canaccord Genuity, said: “WPP needs to build its position in the sports market and therefore this is a strategic asset.”

Moelis & Co and HSBC are financial advisers to Chime, Numis Securities is acting as broker, while Robey Warshaw is advising the buyout consortium.

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