Lord Bell to exit Chime as he ties up £20m PR deal

One of the oddest deals of the year has come to fruition with confirmation that Lord Bell (left), chairman of Chime Communications, the UK marcoms company he founded in 1989, has secured board approval to buy the various Bell Pottinger PR businesses for about £20m. Chime will retain a quarter stake in the new company, BPP Communications, while Bell will step down from the Chime board.

BPP is paying £14.9m in cash, £600,000 in ‘deferred obligations’ (whatever they might be) and 4.1m shares with a nominal value of £4.1m which will be retained by Chime.

The Bell Pottinger PR businesses are Bell Pottinger Public Relations, Pelham Bell Pottinger, Bell Pottinger Public Affiars, Bell Pottinger Sans Frontieres and Bell Pottinger Middle East. The businesses had a combined operating income of £29m in the year to the end of December with profit before interest and tax of £2.4m, a surprisingly modest eight per cent of Chime’s total profit before interest and tax.

Chime will now be focussed on ad agency VCCP, which handles Comparethemarket.com, Coors, O2 and Easyjet among others. The group has also invested heavily in sports marketing businesses over the past two years. CEO Chris Satterthwaite is staying on.

The BP PR businesses have seen a fall in revenue and profits recently after losing a big slice of US government business including the Department of Defense but it remains a mystery why Bell and PR boss Piers Pottinger have decided to separate from Chime.

Sir Martin Sorrell’s WPP has recently raised its stake in Chime to about 20 per cent while saying it opposed the Bell Pottinger deal. It remains to be seen whether or not WPP actually votes against the deal when it’s put to shareholders on June 18.

Another possibility is that WPP might agree to the sale and then move to buy the slimmed-down Chime.

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