Yesterday morning, Chime confirmed in a statement to the stock market that it was in "advanced discussions" around selling, saying the consortium had until 26 August to finalise an offer.
In another statement to the stock market this morning, Chime confirmed that it had reached an agreement to sell 100 per cent of its shares at a price of 365 pence in cash for each share, along with an interim dividend for the current year of 2.53 pence per share. This represents approximately a third more than the closing price of the shares of 275 pence on 29 July.
Chime’s shareholders will vote on the plan at a general meeting of the company which is yet to be scheduled - a notice must be published within 28 days setting out the date of that meeting and further details about the acquisition. WPP currently owns an approximately 20 per cent stake in Chime, but will not be eligible to vote at the meeting.
The acquisition could be completed by the end of October, PRWeek understands.
Chime’s shares will be held by Bidco, "a newly incorporated entity indirectly controlled by funds managed by Providence", in which WPP will acquire "an indirect minority interest", the statement says.
Chime's PR portfolio includes agencies such as Good Relations, Team Spirit and Harvard, while WPP owns PR agencies including Finsbury, Hill+Knowlton Strategies, Cohn & Wolfe, Burson-Marsteller and Ogilvy. In March this year Chime announced a reorganisation that involved scrapping its standalone PR division, and in May it said it expected full-year results to be "below expectations" due to delays in two major international contract negotiations.
Lord Davies of Abersoch, the chairman of Chime, said that the company had "achieved great success to date", but went on to say: "To fulfil Chime’s considerable growth potential, significant new capital is required. Providence and WPP offer Chime both the capital and the industry expertise to fast-track our ambitions to build a full-scale, global sports marketing and communications business."
He also said that Chime’s independent directors had decided unanimously to recommend that shareholders vote in favour of the sale at the as yet unarranged general meeting.
Andrew Tisdale, director of Bidco, said: "Chime’s history is one of innovation, creativity and consistent delivery of superior results for its clients. We believe Chime’s true assets are its people, and are excited to have the opportunity to partner with them as we embark on the next phase of the company’s growth."
Alongside various financial advisers, two comms firms have given PR advice on the deal - Sard Verbinnen & Co to Bidco and Providence, and Bell Pottinger to Chime.