Margaret Thatcher’s former media adviser has moved a step closer to retaking control of the public relations business he founded a quarter of a century ago after agreeing a price of nearly £20 million.
Lord Bell and his long-term business partner Piers Pottinger have agreed to buy the Bell Pottinger business back from Chime Communications for £14.9 million in cash, £600,000 in deferred payments and a 25 per cent stake in the new business.
The formation of the new company — BPP Communications — will mean that both executives will sever formal ties with Chime after 23 years at the helm of the business as chairman and deputy chairman respectively.
The sale, which has been thrashed out since February, comes after a lobbying scandal at Bell Pottinger when some executives were covertly filmed bragging about close ties to politicians.
That has overshadowed the performance of the wider Chime business, which encompasses the advertising department behind Compare The Market’s “meerkat” campaign and a host of sports marketing assets.
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Yet the buyout of Bell Pottinger has pitted Lord Bell, 70, against another of the country’s most famous ad men. WPP, the world’s largest advertising business, is Chime’s largest shareholder and its boss, Sir Martin Sorrell, has been a vocal opponent of the Bell Pottinger sale.
He said yesterday: “If it’s a good deal for Lord Bell, it’s a bad deal for Chime,” adding that it seemed “strange” that the business had sold its PR division for a price equivalent to two thirds of its revenue.
“It sets a terrible precedent,” Sir Martin said of Chime’s decision to hold on to 25 per cent while handing control to BPP. “There are other, better ways of incentivising management.”
Chime needs a majority of shareholders to support the deal. WPP, which owns 20 per cent, could be overruled.