The turning tides at Saatchi group

Last week we asked, is Saatchi & Saatchi cracking up? In this week’s switchback instalment of the fairground saga, we might just as well ask the question of Saatchi the brothers as Saatchi plc.

What, after all, are we to make of Charles Saatchi’s bizarre olive branch proffered to the main board last weekend? To recap, Charles, still rejoicing in the title of Saatchi president, suggested the breach could be repaired by welcoming Maurice back to the bosom of the plc. Maurice would be put in charge of a devolved Saatchi & Saatchi Worldwide Advertising, which at some unspecified point in the future is spun off from the parent company. How shoring up the share price of the parent company in this way would subsequently help Maurice to buy out S&SWA was a conundrum not explained.

The board gave the proposal short shrift, understandably enough. But it is notable for several reasons. To begin with – and interesting in itself – Maurice appears not to have sponsored the overture, though he was aware of it. So we must suspect pressure from another quarter. Gallaher – the main reason for Charles’ handsome four-year contract at Saatchi – seems a candidate here. But we could also ask whether the rupture is bringing pressure to bear on other sources of the brothers’ income. There are, for example, “difficulties” over the precise ownership of Saatchi works of art. And, for that matter, over an estimated $40m, received in settlement after the Adidas options wrangle with Robert Louis-Dreyfus, which is supposedly funding the New Saatchi Agency.

There may be other indications of the tide turning. British Airways’ transit to Maurice is by no means assured. Plc chief executive Scott has finally got off his back foot with a much better orchestrated PR campaign. And the share price has bounced back over ú1 after sustained buying by PDFM, which just happens to be owned by the parent company of Saatchi’s broker.

In the longer run, it might make sense to “Americanise” the group, with an exclusively US quote and mostly US directors. It’s no more than Mitchell Fromstein did with Manpower; and most of Saatchi is, after all, traded in the US. That way a little local London difficulty could be put into perspective while neutralising hostile attitudes towards the UK-led management.

But this is something, if at all, for the future. Now, back to Maurice and Sir Tim…