Three of the four founding partners of M&C Saatchi have bought shares in their troubled agency group in a show of support after the stock price almost halved on Wednesday.
David Kershaw, Jeremy Sinclair and Bill Muirhead collectively spent £1m.
They each spent £331,000 buying 415,000 shares at a price of 79.7p per share, according to a stock market filing released after the market closed.
The purchases took their individual share holdings from about 4.5% to 4.92%.
Maurice Saatchi, a fourth founding partner, did not increase his stake.
M&C Saatchi’s stock price plunged 46% from 148.5p earlier yesterday (Wednesday), after it admitted accounting problems in the UK business have been worse than initially feared and it is making £11.6m in adjustments.
The group also warned that annual profits will be significantly lower than expected and trading has been weak in the fourth quarter.
Campaign revealed earlier this week that M&C Saatchi was offering voluntary redundancies to staff after losing NatWest’s ad account.
The share price has nosedived by three-quarters since August, when it stood at 339p, before the accounting problems first emerged.
M&C Saatchi is worth close to £80m compared with more than £300m before the crisis began.
There is speculation that M&C Saatchi could be a takeover target or the founders could seek investors to take it private.
A source close to the company pointed out that the founders have previously bought shares to demonstrate their confidence when M&C Saatchi has faced problems.
Kershaw told Campaign in September that the accounting crisis is "the most painful" moment for the M&C Saatchi corporate brand since launching the agency in 1995.
He told investors this week: "The only positives that we can offer are that a robust review has been undertaken and we have, under our new group finance director, started implementing processes and procedures to prevent such issues arising again.
"The trading performance in the second half of this year is disappointing. However, our operating businesses remain strong, creative and competitive and we expect that, when combined with the impact of our restructuring coming through, we will have a stronger trading performance in 2020."
This article first appeared on PRWeek sister title Campaign