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Bell and Pottinger’s buyout plan may open the door to a bid from WPP

Lord Bell (Tim Bell as was) and Piers Pottinger are reported to be organising a management buy-out of Bell Pottinger, the PR company they founded in 1989 when Bell left ad agency Lowe Howard-Spink (& Bell).

Bell Pottinger, currently owned by Chime Communications, the marcoms company Bell heads, is one of the UK’s biggest PR outfits and also active internationally where Bell’s reputation as Margaret Thatcher’s former spin doctor attracts clients, including a number of Russian oligarchs and dodgy regimes.

Bell Pottinger has recently come under sustained fire for some of its activities including over-enthusiastic lobbying of UK politicians and tampering with its clients’ Wikipedia entries. This has deeply annoyed Bell who regards such activities as part of the cut and thrust of commercial life, just as he believes any regime in the world should have the freedom to make its case (provided it pays its bills).

So is a buy-out a real possibility or is a pissed-off Bell just threatening to take his ball home?

It would seem a funny time to break up Chime (Bell Pottinger currently accounts for two fifths of its revenues, other businesses include agency VCCP and rapidly expanding sports marketing agency Fast Track) as it has prospered mightily in recent years (according to the published figures anyway) with its valuation rising to around £180m.

This still leaves it a minnow compared to the likes of WPP, Omnicom and Publicis Groupe. And Bell is 71 now, although he has no intention of retiring, and may just want to return to being a super-consultant rather than the boss of a quoted company.

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But buy-outs, or even mooted buy-outs, tend to let genies out of bottles and WPP has recently been nudging up its shareholding in Chime, from around 15 per cent to 17.2 per cent. WPP took a 25 per cent stake in Chime a decade or so ago when Chime was struggling and Bell and WPP boss Sir Martin Sorrell know each other well, a relationship stemming all the way back to the original Saatchi & Saatchi where Bell was managing director and Sorrell reported to him as financial director.

So far this year Sorrell has contented himself with small deals (a lot admittedly, eight at last count) but he may well see these moves as the opportunity to add Chime to his ever-expanding stable. WPP still has board representation at Chime and lists it on its website as a WPP company.

So Bell and Pottinger get Bell Pottinger (WPP already has Hill & Knowlton and Burson Marsteller in PR and a gaggle of lobbying firms) while WPP gets VCCP and the other businesses?

‘Seemple,’ as one of VCCP’s Comparethemarket meerkats might put it.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.
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