Shareholders will vote later this month to approve the spinoff of Cordiant into two publicly held companies, to be known as Saatchi & Saatchi and Cordiant Communications Group; the latter will be the new parent of Bates Worldwide. The companies will each hold 50% of Zenith Media Worldwide.
There has been speculation that when trading in the two new stocks starts Dec. 15, other advertising holding companies such as WPP Group, Omnicom Group and Interpublic Group of Cos. will be readying takeover bids. Bates, whose strong Asian network is an attraction, is seen as the most likely target.
CAUTION OVER BATES
Last week, as the future Saatchi and CCG holding companies made presentations to analysts in London, there was a sense potential buyers might hold off to see how Bates performs under CCG CEO Michael Bungey, now chairman-CEO of Bates Worldwide.
"The view of the CCG board is that this company is not for sale," said Mr. Bungey. "We haven't spent the last seven years of turmoil to get the chance to run our own business and immediately hand it over to other people."
Cordiant last week announced a 30% increase in pre-tax profit to $33 million for the first half of 1997. Revenue was basically stagnant at $547 million, an increase of less than $2 million over the same period last year due to earlier account losses.
Cordiant last year sank to sixth place among the world's top 50 advertising organizations, according to Advertising Age figures. Saatchi & Saatchi and Bates rank No. 13 and No. 15, respectively.
SCOTT AT BOTH COMPANIES
Charlie Scott, currently Cordiant's chairman, is the only high-ranking executive who will span both new companies. Keeping the title of chairman, he will spend two days a week in the Saatchi offices and two days in a new office at Bates. After the first year, he will relinquish his role at one company.
In addition to Bates, the new CCG company will include German agency network Scholz & Friends; HP:ICM, an event marketing and branding company; and a 30% stake in the Facilities Group production company. Hamburg-based Scholz & Friends is being developed as a second agency brand.
One argument for dismantling Cordiant was to free Bates from the rigorous conflict policy of Saatchi's biggest client, Procter & Gamble Co. But since the spinoff was announced in April, the only business Bates has picked up from a P&G competitor is the $12 million U.K. Cussons soaps account.
Without the global clients most networks count on, Mr. Bungey is staking Bates' future on being able to instill an entrepreneurial spirit in the network's managers.
SEELERT CEO AT SAATCHI
Bob Seelert, currently Cordiant's CEO, will fill the same role at Saatchi & Saatchi, which includes the Saatchi network; New York agency Cliff Freeman & Partners; Rowland Worldwide public relations, 70% of the Facilities Group; and Siegel & Gale, a corporate identity business. Saatchi & Saatchi said it is dropping "Advertising" from its name to reflect the diversified businesses it is now engaged in.
Kevin Roberts, CEO of Saatchi & Saatchi Worldwide, has made it clear that he