The management of another Cordiant subsidiary is planning to buy its way out of the communications group formerly known as Saatchi & Saatchi plc.
Senior managers in the US and Europe from PR company Rowland Worldwide are preparing a bid to put to the Cordiant board. The company has more than 40 offices worldwide, a client list that includes Procter & Gamble, DuPont, Canon and Hewlett-Packard and a worldwide income of $35m (22m).
A deal would be welcomed by Cordiant, which at the end of last year had an average net debt of 118m, an increase of 6m on 1993.
The move follows the earlier sale of the US end of Cordiant’s third ad agency network, Campbell Mithun Esty, and its managers to the InterPublic Group for more than $40m (25m) in April. Its London offshoot CME KHBB is also in the process of executing a management buy-out from the Cordiant group.
Saatchi & Saatchi bought the Rowland Company in 1986, but in London it has always had a strained relationship with its parent. There has been speculation about the sale of the agency for several months. Insiders admit it has been hit hard by the Maurice Saatchi affair.
“There have been difficulties in assimilating Rowland into the Cordiant group,” says one insider. “And there have been talks internally about an mbo. There have not been any formal discussions with the Cordiant board yet, but the management is looking at prospects for the future.”
Last year, 30 per cent of Rowland business in the UK came through the Cordiant group, largely because of the launch of the National Lottery.
It is understood that a management buyout would seek to retain some links with the Cordiant group. Cordiant refuses to comment.