Bob Seelert, Cordiant's chief executive, and Charlie Scott, chairman, are to propose splitting the business into three separate companies, two of which will be publicly floated. The demerger would see Saatchi & Saatchi Advertising Worldwide quoted on the UK stock market and Bates, the US agency bought by the brothers in 1986, floated in New York.
The plans sever the remaining links with the Saatchi brothers' ill-fated quest to build their company into the world's biggest advertising agency. Since the late 1980s the group, formerly known as Saatchi & Saatchi, was hit by a series of setbacks culminating in the acrimonious defection of the brothers, Maurice and Charles, two years ago. They formed a rival agency, M&C Saatchi, which poached the Conservative Party's long-standing account.
The latest strategy, hatched by advisers SBC Warburg, is an attempt to unlock hidden value for investors. Rumours of a demerger have already pushed Cordiant shares up from a low of 96.5p this year to 130p, valuing the company at pounds 577m. Some analysts have suggested a break-up value of up to 200p a share, valuing the separate businesses at more than pounds 800m. Two years ago Cordiant raised pounds 127m in a rescue rights issue at just 60p a share.
The demerger of Bates is thought to have gone down well with large corporate clients and staff. In the US, Bates has been prevented from aggressively bidding for work from consumer goods companies because Saatchi & Saatchi Advertising Worldwide in London counts as one of its biggest clients Procter and Gamble, the soap powder to foods giant.
The final element in the jigsaw is Zenith Media, Cordiant's advertising space-buying arm, which will be jointly owned by the two agencies. The top jobs in the demerger are likely to be go to existing executives.