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JOHANNESBURG -- Bates Worldwide has engineered a rescue for its troubled South African agency by buying a controlling stake in a fast-growing creative hot-shop HarrisonHuman and merging it with BLGK Bates under the leadership of the agency's founders, Claire Harrison and Gerry Human.

What's now known as HarrisonHuman Bates has fee and commission income of about $2 million.

Almost all Bates staff, including senior executives, have left, so in effect the merger amounts to a reverse takeover.

HarrisonHuman, named by the Financial Mail as Emerging Agency of the Year, ranks 29th in size but 10th in creative awards. BLGK Bates was the flagship agency of Cordiant Communications-owned Bates in Africa group, which also includes design and direct marketing units. The agencies operate independently and report directly to Bates Europe, which had intended to establish a local holding company. Penta Communications, the media agency part-owned by BLGK Bates, closed down in recent weeks.

Bates in Africa experienced a 22% fall in income last year, and its ranking fell from 11th in 1999 to 14th last year. The group's income was about $5 million. With British American Tobacco as its biggest client, it was badly hit by the government ban on tobacco advertising.

HarrisonHuman has such clients in its portfolio as Singapore Airlines, local bookstore chain Exclusive Books and Imax Theatre. It's now presented with huge opportunities to work with Bates' blue-chip client list, which includes Warner Lambert/Pfizer, EDS and the recently acquired Wella.

The buyout of HarrisonHuman follows a formula Bates has used repeatedly with great success, said Bates Europe Chief Operating Officer Stanley Bendelac from Johannesburg for the announcement.

"When we have had difficulties in a European office, we have looked for a small dynamic agency to acquire and take over the business," Mr. Bendelac said. "We have done it in Holland, Portugal and Belgium. It has never failed us. There's a clear link between creative ability and profits." -- Tony Koenderman

Copyright May 2001, Crain Communications Inc.

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