Chime Communications has agreed to a £374M ($585M) takeover joint offer from marketing rival WPP and U.S. buyout firm Providence Equity Partners, according to Aglionby & Cookson of the FINANCIAL TIMES. Under the terms of the deal, Chime shareholders will receive 365p in cash for each share they own. The offer includes an interim dividend of 2.53p per share. Shares in Chime were trading up 4.5% at 360p in early London trading on Friday after surging 26% on Thursday "after news of talks between the two companies was disclosed." Providence will finance the deal "with a mix of cash and debt." Chime will be delisted from the London Stock Exchange on completion of the deal. Chime Chair Mervyn Davies said that while the company had "achieved great success in building a leading position in the global sports marketing and communications industry ... significant new capital is required" to fulfill the company's potential (FT, 7/31). In London, Ashley Armstrong reported Chime's sports marketing agency, CSM Strategic, is chaired by British Olympic Association Chair Sebastian Coe. Coe, who sits on the board of Chime and owns a .6% stake in the company, has "already given his support to the offer." The company said that because sports marketing was a "significant part of Chime's business, it is heavily exposed to the cycles of major sports events," which has made it "difficult to deliver consistent financial results as a listed company" (TELEGRAPH, 7/31). REUTERS' Aastha Agnihotri reported Providence, founded in '89, manages more than $4B in assets and has invested in sectors such as advertising, sports and entertainment. Moelis & Company and HSBC are financial advisers to Chime. Numis Securities is "acting as broker to Chime." Robey Warshaw is advising the buyout consortium (REUTERS, 7/31). AD AGE's Emma Hall reported Chime-owned U.K. agency VCCP's clients include telecom O2, Coors, ING Direct, EasyJet, Vans, Wal Mart-owned Asda, and comparethemarket.com, for which the agency created the "iconic" and long-running "Meerkat" campaign. Chime Communications owns 56 agencies and is "now mostly known as a sports marketing specialist." WPP has been building its sports marketing portfolio and earlier this year led a $250M investment in start-up Bruin Sports Capital (AD AGE, 7/30). PR WEEK's Sam Burne James reported the acquisition "will be completed by the end of October." 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." Davies 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" (PR WEEK, 7/31).
