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[london] In an unusual three-way transaction, WPP Group is buying a minority stake in a public relations group that will in turn merge with one of the U.K.'s leading independent ad agencies, HHCL & Partners.

The deal gives HHCL the access to an international network it needs to grow, while allowing it to retain its identity as an agency brand. And WPP's investment enables HHCL's partners to cash in after 10 years spent building the agency.


WPP will buy 29.9% of U.K. PR group Chime Communications for $25 million, conditional upon Chime buying Howell Henry Chaldecott Lury Group Ltd, HHCL's parent company. The chairman of Chime is Sir Tim Bell, who worked with WPP Group Chief Executive Martin Sorrell at Saatchi & Saatchi in the 1970s and early '80s.

"Being associated with WPP has to give us some opportunities," said Robin Price, an HHCL partner. "In the past, we've had a couple situations where we've lost clients through international alignment who we'd prefer not to have lost and they'd prefer not to have gone."

The deal gives WPP a stake in two successful U.K. businesses that previously had no access to international resources.

Mr. Price said no specific plan has been worked out but that HHCL will have access to WPP's two international networks, J. Walter Thompson Co. and Ogilvy & Mather Worldwide.

"It will be on a client-by-client and needs basis," he said. "This allows us to speak to a far wider range of clients. We're very ambitious about continuing development of our brand."

HHCL ranks No. 22 in the U.K., with 1996 gross income of $20 million on billings of $232 million, according to Advertising Age figures. The agency was founded in 1987 by five young British admen, led by Managing Partner Rupert Howell, who left a fast-track career at Young & Rubicam; he joked at the time about trading in his company car for a bus pass.


Mr. Howell will take the additional title of joint chief executive of Chime. Piers Pottinger, currently chief executive of Chime, will also hold the title of joint chief executive.

HHCL's clients include softdrink marketer Britvic, the U.K.'s Automobile Association and Martini vermouth. The agency is best known internationally for a Britvic spot for Tango that was one of the big creative award winners this year. In the spot, a U.K. soft drink executive is enraged by a letter from a young Frenchman critical of Tango's black currant flavor and challenges him to a boxing match.

Chime's clients include Coca-Cola and several U.K. merchant banks; there appear to be no problems with conflicts among WPP, HHCL and Chime.

HHCL also has a subsidiary, HHCL Brasserie, which does commercials on a project basis.

"By merging with a PR group, we're maintaining our brand pretty much intact," Mr. Price said. "There are none of the problems when you crash agencies in the

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