Abbott Mead Vickers is in talks to sell Leagas Delaney, one of its two wholly owned advertising subsidiaries, to its management. A deal could be struck within a few weeks.
Senior management at Leagas Delaney are working on a detailed business plan to be presented to the parent company by the end of the month. Tim Delaney, the agency's founder, Bruce Haines, the agency's chief executive, and four other executives, are behind the buyout proposal.
Leagas has annual billings of pounds 70m world-wide, and it is understood management is looking to offer Abbott Mead in the region of pounds 10m for the business. Insiders say Abbott Mead has accepted Leagas's breakaway "in principle", but a price has yet to be settled.
Rumours about Leagas's plans to separate from Abbott Mead have been circulating for some months. However, it is believed that several early attempts to hammer out an agreement proved inconclusive. Now, following a valuation of the business by KPMG, the chartered accountants, Leagas is thought to be closer to clinching a deal.
Neither Peter Mead, Abbott Mead's chairman, nor Mr Delaney were available for comment on the Leagas situation.
Leagas executives feel they would thrive outside the Abbott Mead media empire, which has expanded over the last few years to incorporate the media planning and buying agency New PHD, the customer magazine publisher, Redwood Publishing, and some public relations companies.
Some industry observers have said that Leagas is overshadowed by Abbott Mead, which earlier this year leapfrogged to top place in Campaign magazine's annual league table, displacing Saatchi & Saatchi.
Leagas won international work for Fanta, a Coca-Cola brand, at the end of last year. BBDO, which holds a 26 per cent stake in Abbott Mead, handles the rival Pepsi account world-wide. One advantage of the buyout would be to remove any possible conflict of interest between the two brands.
Leagas was founded 17 years ago by Ron Leagas and Mr Delaney and has 95 employees. Its head office is in London and last year it set up an office in San Francisco after winning international work from Adidas, worth pounds 20m in annual billings. The win was the agency's biggest to date.
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