Saudi Prince buys into Cordiant
Wednesday 14 May 1997
The Prince - who only last month took a 1 per cent share of Planet Hollywood - bought 13.3 million shares in Cordiant, which plans to demerge into two parts later this year. Cordiant's shares firmed 1.5p to 129.5p yesterday.
The City appeared bemused by the move, with one analyst viewing it as "a bit of a game" for the Prince, who is seen as an interested but passive investor in media companies. Another said he was "a shrewd guy" who could take a bigger stake in one of Cordiant's international agencies, Bates Worldwide or Saatchi & Saatchi, after the demerger. However, an outright bid for any part of the company is seen as highly unlikely.
A spokesman for Cordiant pointed to the Prince's business links with the company, describing him as "a valued client" of Saatchi & Saatchi in the Middle East. He added that the Prince was supportive of the demerger and of management plans for the company. "The Prince is a renowned investor. Welcome aboard," he said.
Prince al-Waleed , who is estimated to be worth around $12bn (pounds 7.5bn), has a diverse portfolio of business interests. He has stakes in Canary Wharf, London, the Apple Computer group, Citicorp, Euro Disney, Saks Fifth Avenue, George V in Paris, Mediaset and the Four Seasons. He also has a joint venture with Michael Jackson in Kingdom Entertainment, a global entertainment company launched last year.
Derek Terrington, media analyst at Teather & Greenwood, said the market had not been over-excited by the Prince's investment: "The market isn't betting on anything momentous. It's possible the process of demerging needs some kind of backing."
When Cordiant announced its demerger last month, the City was sceptical, viewing the plans as an admission that the holding company had ceased to add value. The company had fallen from favour since a shareholder revolt led to the departure of the founding Saatchi brothers, Maurice and Charles, two years ago. Cordiant has struggled to overcome the client losses that followed in the wake of the brothers' defection.
There has been widespread expectation that Bates and Saatchi would be subject to bid speculation, but it is likely any bids would need agreement from the agencies' clients.
Following the demerger - which is likely to take effect in December - Bates and Saatchi will have a 50 per cent stake in the media buying company, Zenith Media.
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