EDITORIAL: FD MBO deal is as good as complete

It has been a long negotiation. For nearly a year, it was first an open secret, then no secret at all, that troubled Cordiant Communications was trying to sell its City PR arm Financial Dynamics to its management.

As PRWeek went to press, there was still no official confirmation that CEO Charles Watson and his colleagues had succeeded in wresting control of their beloved agency from the apparently moribund Cordiant.

Unofficially, the deal is done, at a price close to the long-rumoured £25m - financed by private equity cash from Advent and debt from Allied Irish Banks.

The only outstanding issue is the consent of Cordiant's many lending banks. However, since they are owed almost £200m, the chance to recoup over ten per cent of that in one disposal is not something they are likely to reject.

This logic applies equally to speculation the deal could be hindered by potential acquirer WPP's due diligence process, widely reported as being in its closing stages, despite the company's official reticence this week.

The fact that some of the debt that WPP CEO Sir Martin Sorrell would have to take on will be paid down in the near future, is likely to sweeten rather than sour the MBO deal from his point of view.

Finally, there is the suspicion that Sorrell has reached the same view as the rest of the industry - that with Hill & Knowlton, Burson-Marsteller, Finsbury and others in his portfolio already - he owns enough PR firms. It is someone else's turn to build an empire.

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