UK marketing services group Chime Communications has revealed it has reached an agreement regarding its sale to US private equity investment firm Providence Equity and advertising and public relations giant WPP.
Chime yesterday (Thursday) confirmed it was in advanced discussions with Providence and WPP over a possible buyout deal. The group, which includes the CSM Sport & Entertainment agency, stated the potential deal featured an offer of £3.65 (€5.15/$5.70) per share and interim dividend for the current year of 2.53 pence per share.
The Providence and WPP consortium had been instructed to announce a firm intention to make an offer by August 26. Chime today (Friday) said in a statement that it has reached an agreement regarding its sale to the consortium. Providence and WPP will now pay approximately £374m under the agreed buyout deal.
The offer represents a premium of approximately 33 per cent to the closing price per Chime share of £2.75 on July 29, the last business day before the talks were made public. The bid also includes a premium of approximately 37 per cent to the average closing price per Chime share of £2.66 during the one-month period to July 29.
WPP, whose chief executive is Martin Sorrell (pictured), already owns a 20 per cent stake in London-based Chime, which derives a significant proportion of its business interests from major sporting events, including the Olympic Games and football’s Fifa World Cup.
“Chime has achieved great success to date in building a leading position in the global sports marketing and communications industry, which is reflected in the attractive premium being offered to shareholders,” Chime chairman Evan Mervyn Davies said.
“However, to fulfil Chime's considerable growth potential, significant new capital is required. Providence and WPP offer Chime both the capital and the industry expertise to fast-track our ambitions to build a full scale, global sports marketing and communications business.
“Taking this into account, Chime's independent directors unanimously recommend that shareholders vote in favour of the resolutions at the general meeting and in favour of the scheme at the court meeting.”
Andrew Tisdale, managing director of Providence’s London office and director of the consortium, added: “Chime's history is one of innovation, creativity and consistent delivery of superior results for its clients. We believe Chime's true assets are its people, and are excited to have the opportunity to partner with them as we embark on the next phase of the company's growth.”