Freud makes £14m from sale of his PR company

Matthew Freud, the PR guru, has become one of the richest public relations executives in the UK by selling part of a £30m shareholding in his eponymous firm to the French advertising giant Publicis.

Matthew Freud, the PR guru, has become one of the richest public relations executives in the UK by selling part of a £30m shareholding in his eponymous firm to the French advertising giant Publicis.

The son-in-law of Rupert Murdoch and son of former Liberal MP Sir Clement has built up a PR company representing global corporations including Pepsi, Nestlé, Sony and Time Warner and brands including Nike, KitKat, Tropicana, Walkers crisps, Nescafé, Jack Daniels and AOL.

He has sold a 50.1 per cent stake in Freud Communications, the UK's largest independent consumer PR company with a staff of 106, to Publicis, the second-largest media group. It will give Publicis, whose portfolio includes the high-profile advertising agencies Saatchi & Saatchi and Leo Burnett, a strong foothold in the UK public relations market.

Freud Communications approached Publicis when it became clear the PR firm needed the clout of a global conglomerate behind it to expand internationally. It chose the French group because of its reputation for allowing the cultures of companies it buys to flourish.

Based on an operating profit to the end of June 2005 of £4.6m, Freud Communications is valued at about £46m. Before selling, Mr Freud, the chairman of Freud Communications, had a two-thirds majority stake in the company. He will make about £14m from the Publicis deal and keep about 66 per cent of the remaining shares.

Mr Freud said: "A partnership with Publicis Groupe must be the ultimate goal for any independent marketing agency. To be able to preserve and develop our business and culture but have the resources of the most creative global network will provide great opportunities for clients and staff alike."

Unlike some PR men, Mr Freud prefers to remain behind the scenes and let his clients do the talking. With a profile like his, however - he and his television executive wife Elisabeth Murdoch are considered one of the media world's golden couples - it is unsurprising he has always been a subject of fascination beyond the PR industry.

Ravi Chandiramani, the news editor of PR Week, said: "The perception of Freuds is still as a consumer agency with lots of access to celebrities and high-profile journalists. While that remains true, they have evolved into a more strategic agency and taken on more global corporate clients."

He added: "While they have the talent and the contacts, they haven't had the infrastructure to be able to service more global clients."

It is the second time Freud Communications has been sold. In 1994, Mr Freud sold the PR firm he founded in 1985 to Abbott Mead Vickers for a reported £10m, before buying it back in 2001, exactly four years ago, after AMV was taken over by Omnicom.

It is Publicis' first major acquisition since it went through a thorough reorganisation, putting its PR and communications companies into a single division last month. Maurice Lévy, the chairman and chief executive of Publicis, said: "Matthew Freud is a unique and innovative presence in the world of British public relations.

"Bringing him and Freud Communications into the Publicis Groupe fold will demonstrate to our clients - both British and global - our commitment to marshalling the best and brightest skills to ensure their success."