Saatchi on course for £70m float

By NICK GOODWAY FOR MAILONLINE
Updated:

 

ADVERTISING agency M&C Saatchi confirmed today it will float on the stock market in the next fortnight. Investment bank Lehman Brothers plans to place new and existing shares in Saatchi ahead of its float on the Alternative Investment Market by mid-July.

Pricing has yet to be fixed but is expected to value the group, which counts British Airways, Royal Bank of Scotland and the AA among its clients, at between £70m and £75m. Industry giant WPP is valued at nearly one hundred times that - £6.8bn.

M&C Saatchi was founded by brothers Maurice and Charles after they left Saatchi & Saatchi.

The five founders of M&C Saatchi, including Charles (not a director) and Maurice (executive director), will sell down about 40% of their existing shares, each raising approximately £4m and leaving them with stakes worth about £6m , which they have promised not to sell for two years.

M&C Saatchi is raising only £10m of new money through the float, which it will use to roll out into Europe. Profits rose from £7m to £7.5m on revenue up 9% at £59m last year.

Sir Martin Sorrell, who many years ago was finance director of Saatchi & Saatchi, holds 1.7m shares in his own WPP agency, worth £98.5m after they rose 4p to 577p on his address to today's annual shareholders' meeting.

Sorrell said the US and Asia-Pacific are still growing strongly, while Latin America is recovering strongly from the depressed levels of last year. France Germany and the UK remain tough but Eastern Europe is looking much better. Revenue for the first five months of the year is up 6%.

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