Cordiant faces split
Buyouts threaten to strip former Saatchi group down to two main agencies
Sunday 11 June 1995
At least two subsidiaries, the public relations arm Rowland Worldwide and the Chicago-based direct-marketing business, Kobs Worldwide, are understood to be discussing management buyouts.
Charles Scott, Cordiant's chief executive, will face his shareholders on Tuesday to put as bold a gloss as he can on the recent rupture with the group's founders, Charles and Maurice Saatchi.
The upshot of that split was that the Saatchi brothers left to set up a new agency, winning such plum advertising accounts as British Airways and Mars and attracting several key executives to join them. Threatened lawsuits were finally shelved only last month.
The authoritative Wall Street Journal has been told by several people in the know that Rowland's management recently drafted a detailed buy- back proposal for Mr Scott. One report suggests Mr Scott has already studied the proposal.
Other non-advertising subsidiaries of Cordiant include Siegel & Gale (marketing strategy), National Research Group (market research), HP:ICM (conferences) and Facilities Group (design, pre-press and television production).
Tim Jackson, Cordiant's investor relations chief, said: "We have a lot of good quality businesses that are profitable and we don't need to sell any. There have been talks on and off with Rowland about making a possible offer. But our strategy is to concentrate on the businesses we have got. We are not actively looking to sell these businesses, whether core or other."
Mr Scott is expected to present an upbeat picture of prospects for Cordiant, now that the past has been put firmly behind it. Shareholders at the annual meeting in the QE2 Conference Centre in Westminster will seek re- assurance that the group is on an even keel again and that the board has regained a sense of direction after the feud with the Saatchi brothers. In return for dropping allegations of conspiracy and wrongly calculated pension transfers, Cordiant asked only that the brothers did not call themselves "New Saatchi" and did not recruit any more staff or clients until next year.
Last year, Mr Scott's salary was frozen at pounds 300,000, but his bonus rose from pounds 21,000 to pounds 137,000. The group's pre-tax profits rose from pounds 19.2m to pounds 32.4m.
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