The agency is understood to have hired Results International, the mergers and acquisitions consultants, to advise it on a possible sale.
Talks are believed to have reached an advanced stage, but a deal has yet to be signed. Marc Nohr, the managing partner of Kitcatt Nohr, said: "We have not accepted an offer from anyone."
Meanwhile, Naked Communications is promising that it will retain its "unconventional" and media-neutral culture after its acquisition.
Talks with Photon started in November, but the process accelerated last weekend when the Naked group chief executive, Nigel Long, the founder Jon Wilkins and the finance director, Barry Dudley, flew to Sydney to sign the deal.
Photon's upfront payment of £16.5 million cash could form a small part of the total valuation of the company, with an uncapped four-year earnout potentially worth several times the initial amount.
Naked's founders said a key attraction of Photon is the autonomy it affords to constituent companies. The group has been building its presence outside of Australia with European acquisitions including Frank PR and the experiential agency Sledge, among others.
The deal cleans up the ownership structures of several Naked joint ventures. Most notably, the digital strategy agency Hyper, a venture with Fallon, which becomes a wholly owned Naked subsidiary.
Naked has upwards of 30 shareholders, all of whom are incentivised under the four-year earnout. These include the ad agency Mother, which backed it from launch in return for a stake of 30 per cent.
Naked claims Photon can give it the financial backing for an acceleration of growth into new markets, including China, Brazil and India.
This article was first published on Campaign