Huntsworth talks put CEO in the spotlight

Senior PR executives and industry watchers are divided about Huntsworth's move this week to sell its non-core marketing service businesses and create a purely PR-focused group.

Although the talks to sell around £60m of assets to marcoms group Media Square have surprised few, observers differ over whether a deal between the firms could work and what the future holds for Huntsworth chief executive Richard Nichols, who is rumoured to be leaving.

Some believe the move, which follows Huntsworth's merger with Incepta in April, will enable the new group to get rid of non-core businesses quickly.

'This is a good idea and it will work,' said Jim Surguy, MD of marcoms management consultant Results Business Consulting. 'Media Square is offering to take all of the non-core businesses out of Incepta instead of Incepta going through the difficult and costly business of selling them off bit by bit.'

Such a package deal would likely involve Media Square acquiring most, if not all, of the companies in the former Incepta's direct promotional and relationship marketing division. These include promotional marketing agency Dynamo and profitable direct mail firm Finex, whose clients include BSkyB.

Other businesses that could be in the frame include Lloyd Northover from Incepta's design and branding division.

However, one senior industry figure suggested that Media Square might baulk at a price tag which may be inflated because of the legacy of the Huntsworth merger.

'Shareholders will be expecting a good return from any sale and £60m is a lot of money to Media Square,' the source said.

But while £60m would wipe out Incepta's £52.1m 2004 debt, some say the price is still less than the revenue for the division under discussion.

Commentators agree Nichols could leave after the deal but it is thought Media Square shareholders would resist his appointment to their board. Huntsworth declined to comment beyond the former's statement to the London Stock Exchange on Monday confirming talks.

According to the statement, 'the strategic review will include proposals for the composition of the board and senior management'.

Nichols was unavailable for comment.

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