Cordiant Sets Out Demerger Plans

Cordiant, which will next week hold an Extraordinary General Meeting to finalise the demerger plans it announced in April (subscribers see Cordiant Announces Demerger), expects that Saatchi & Saatchi will be able to increase its proportion of global business while Bates will concentrate on its strengths in local markets.

In an interview in the FT Michael Bungey, chief executive of Bates, says that regional directors will be made into executive board members and the agency will look beyond advertising into other forms of marketing.

Lorna Tilbian, at Panmure Gordon, forecasts that shares in the two groups will be worth at least 70p each when they are traded separately in December and this could increase to 90p. It is also believed that Bates could rapidly increase its value due to takeover speculation while Saatchi could slip because the demerger is generally regarded as less important for its future growth.

Rowland Worldwide, the New York-based PR consultancy, will now form part of the Saatchi group instead of Bates and the Facilities Group, which provides production services in London, will be split 70-30 between Saatchi and Bates.