Clemmow Hornby Inge has announced a deal with WPP, snatched from under the nose of French group Havas, to sell a 49.9% stake of its business to the Sir Martin Sorrell-run group, as exclusively revealed in Marketing Week this morning (Wednesday).
The surprise deal with WPP follows mounting speculation that a sale of the agency to Vincent Bollor»-controlled Havas was imminent.
Earlier this year, Bollor» was reported in the press as saying that a deal was weeks away from being agreed. The now-failed bid was led by Havas chief executive Fernando Rodes and Euro RSCG chief executive David Jones.
The CHI-WPP deal, similar to Bartle Bogle Hegartyπs 49% sale to Leo Burnett in 1998, will include its direct marketing offer, Hall Moore CHI. The network deal will give the agency international scale while allowing it to retain its independence. It will also provide CHI with access to an international network as well as the media-planning and buying power of Group M.
In return, CHI is expected to fill the gap left by the closure of WPP’s ‘hot- shop’, United.
The agency has built up billings of around £200m since it launched five years ago with client Carphone Warehouse. It made a pre-tax profit of £2.1m in 2005 on turnover of £28m. Revenue for the agency was £18.5m for the year to the end of June 2006, and a multiple of six would value the companyπs 49.9% minority stake at around £60m.
It is thought that Hornby has also been in talks with Publicis-owned Dentsu.