WPP move helps Chime secure ad agency deal

Chime Communications was on the brink of completing its purchase of advertising agency HHCL and Partners, as PR Week went to press this week.

Chime Communications was on the brink of completing its purchase of

advertising agency HHCL and Partners, as PR Week went to press this

week.



Marketing services group WPP played a crucial role in the final

negotiations by taking a sizeable stake in Chime, giving HHCL its

long-desired access to an international advertising network.



WPP’s involvement brings an additional bonus for Chime which will gain

links with the bigger group’s global PR networks, Hill and Knowlton and

Ogilvy, Adams and Rinehart.



The pounds 20 million acquisition of HHCL is expected to double the size

of Chime, which currently has a market capitalisation of around pounds

30 million, attracting a broader base of investor interest. Confirmation

that the two agencies were in advanced negotiations has already pushed

Chime’s shares up 5.75 p to 54.5p.



Sir Tim Bell will remain as chairman of Chime, while current managing

director Piers Pottinger will become deputy chairman and also joint

chief executive with HHCL chief executive Rupert Howell.



HHCL, Chime and WPP agencies will continue to operate independently, but

are expected to work together on shared clients.



WPP will pour pounds 15 million into Chime coffers in return for a 29.9

per cent share of the enlarged company and the option of two executive

directorships.



However, WPP chief executive officer Martin Sorrell will not be joining

the board.



There will be no formal links between Lowe Bell, H&K and OA&R but use

will be made of international networks on a client-by-client basis.

OA&R’s Asia Pacific network is likely to prove a particularly useful fit

for Lowe Bell’s financial client base.



However, some insiders at WPP PR operations have already expressed

doubts on the willingness of H&K and OA&R to open the doors of their

international networks to Lowe Bell, citing cultural differences between

the agencies.



Leader, p9.



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