Chime Communications has "long been considered a prime takeover target," according to Robert Cookson of the FINANCIAL TIMES. On Thursday, "Chime's predators were revealed." Martin Sorrell's WPP and U.S. buyout group Providence Equity Partners have "teamed up to buy the sports marketing specialist" for more than £350M ($546M). The price tag -- a "premium compared to the wider sector" -- highlights how the acquirers "see plenty of opportunity in sports marketing." Chime has cautioned that "there can be no certainty" that a deal will happen. But judging by the market reaction, investors believe an acquisition "seems likely." Chime's share price surged 26% to 346p on Thursday -- not far from the 365p per share cash offer under discussion. Peel Hunt analyst Malcolm Morgan said, "It looks like a done deal." WPP, the world's largest marketing services group, already owns a 20% stake in Chime. The group "plans to retain its share as part of the deal with Providence." Morgan said that whether WPP will "take full control of Chime by buying out Providence" when the private equity group is ready to sell is "the interesting question." Sport has become one of the sectors that the marketing industry "is most excited about." Even as other areas of the media landscape "fragment, big sporting events still attract large, passionate audiences -- and, therefore, attractive opportunities for marketers." Brand sponsorship of events "is harder for viewers to ignore than conventional advertising." Canaccord media analyst Simon Davies said, "In an online world, having your brand attached to a football player or on a Formula One car is very attractive. Chime has something that WPP needs: critical mass in sports marketing." Though WPP and Providence declined to comment on their plans, "analysts say there is an opportunity to combine Chime's sports division with some of their existing assets" (FT, 7/30).
