Lord Coe's Agency Chimes With Providence Bid

The marketing services group which owns Lord Coe's sports agency is in advanced talks about a takeover valuing it at more than £350m.

Sky News can reveal that Chime Communications has received a joint bid approach from Providence Equity, one of the world’s biggest buyout firms, and WPP Group, Chime’s FTSE-100 rival.

A statement confirming that Chime’s board has recommended an offer for the company is expected to be made to the London Stock Exchange as soon as Thursday, according to people close to the situation.

One insider said the bid was likely to be pitched at more than 360p-a-share, representing a premium of just over 30% to Wednesday’s closing share price of 274.5p.

The offer is understood to be being led by Providence, while WPP plans to roll over its roughly 20% stake in Chime as part of the bid, said the insider.

A takeover of Chime would crystallise significant sums for executives including Chris Satterthwaite, the chief executive, and Lord Coe, executive chairman of CSM Sport & Entertainment.

Sources said that Providence was keen to retain Chime’s executive team to lead the company once the takeover completes.

In addition to CSM, which has a major presence in Formula One and other motorsport series following its 2013 purchase of JMI, Chime owns the award-winning advertising agency VCCP, which counts EasyJet and O2 among its clients.

It also has a big healthcare marketing operation and owns research businesses including Naked Eye and Brand Democracy.

Chime, which is chaired by the former Trade Minister Lord Davies, has repositioned itself since a deal in 2012 which saw it sell Bell Pottinger, the public relations outfit co-founded by Lord Bell, a close adviser to the late Baroness Thatcher.

At that time, Chime’s share price hovered below the 150p mark, since when its performance has improved markedly.

Providence’s interest in Chime will make it the first UK-based company to be bought by the US private equity group since it acquired a controlling stake in Ambassador Theatre Group last year.

In the US, its investments include Learfield, a college sports rights and marketing agency.

WPP has also invested significantly in the sports arena, investing in the launch of Bruin Sports Capital, a firm headed by prominent industry executive George Pyne, earlier this year.

Relations between WPP and Chime have occasionally been testy, with the former objecting to the latter’s purchase of JMI two years ago.

If completed, the takeover of Chime would be the second so-called public-to-private transaction announced in London in as many days, following confirmation of an agreed bid for the property developer Quintain.

Such transactions led by private equity groups have become a rarity, largely because changes to takeover rules have made it more difficult to organise financing within a truncated timetable.

The proposed takeover of Chime will also underline the extent to which so-called boutique advisory firms have supplanted the traditional role of larger investment banks on many deals.

Moelis and Robey Warshaw, two firms set up in the wake of the financial crisis, are advising Chime and Providence respectively, insiders said.

Chime, Providence and WPP all declined to comment.