Saatchis back in the market with a bang

Charles and Maurice Saatchi, the former heads of the Saatchi advertising empire, were pounds 10m better off yesterday when their new investment vehicle made a spectacular return to the stock market. Mick Jagger of the Rolling Stones, who owns shares in the company, has also made a significant gain.

The Saatchi brothers have also emerged as part of a rescue team assembled to bail out Head, the troubled sports equipment maker. The brothers, who made pounds 25m from the flotation of Adidas, will take a 5 per cent stake in the company

Shares in Megalomedia, Maurice Saatchi's vehicle for acquisitions in the multimedia sector, soared to 83p on their first day's trading on the Alternative Investment Market yesterday. Shares in the company had been suspended at 33p pending the company's first two acquisitions.

The soaring share price values the Saatchis' stake at pounds 14m, compared with pounds 3.5m prior to the re-listing.

Megalomedia, which now has a value of pounds 35m, is the new name for Graduate Appointments Services, a recruitment agency run by Josephine Hart, Maurice Saatchi's wife. The company was listed on AIM earlier this year but renamed pending the acquisition of two media companies. Its return to AIM was overseen by Shaw Capital, which acted as nominated advisers. The Saatchis now account for around 40 per cent of the new company.

Megalomedia has acquired two companies including Forward Publishing, which produces magazines for companies such as Tesco and Marks & Spencer. Megolamedia also took a 39.8 per stake in The Framestore, a digital special effects company. It favours an aggressive acqusition strategy in multi- media groups.

In a separate media development, Paul Hamlyn, a non-executive director of the publishing group Reed Elsevier, has made pounds 21m following the sale of shares in the company. "I had a minor cash-flow problem," he said.

He sold two million shares in the company but retains 22 million. Mr Hamlyn received his shares in the company after Reed International acquired Octopus Books in 1987 in a deal worth pounds 535m. It is the first tranche of shares he has sold and said he had no immediate plans to sell any more.