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LONDON-The ante was raised last week in the high drama of Saatchi vs. Saatchi, and the speculation heightened: Where is the $40 million Robert Louis-Dreyfus paid Maurice and Charles Saatchi to go away and let him proceed with buying Adidas?

In New York, a state trial judge delayed a ruling on Saatchi & Saatchi Co.'s $50 million breach of contract suit against former Saatchi & Saatchi Advertising North America Chairman-CEO Bill Muirhead. He and six other executives bolted the agency earlier this month, planning to join Maurice Saatchi's New Saatchi Agency.

Their departure-and Saatchi & Saatchi client British Airways' decision last week to include both shops in its $135 million account review (see story at left)-mean time is becoming almost as important to Mr. Saatchi as it was to Mr. Louis-Dreyfus late last year, when he negotiated the Saatchi settlement.

Executives close to the deal said Mr. Saatchi has little, if any, of the money from the settlement with Mr. Louis-Dreyfus.

"The question is how much [of the settlement] is cash in hand?" said a legal expert, noting that commercial settlements can include installment payments, promissory notes and other forms of deferred non-cash payments. It is often possible to borrow against such deferred payments.

"Five years [of deferred compensation] wouldn't surprise me," said Michael Burd, a partner at U.K. law firm Lewis Silkin.

The Saatchi camp maintains the brothers are wealthy in their own right. They certainly have deep-pocketed friends and associates.

But to wrest an account like British Airways away from the agency he co-founded 25 years ago, Mr. Saatchi will need to create or align with an international network-likely before he makes his pitch in March.

He is pursuing perhaps plugging his agency into an existing network to service international business. His talks with D'Arcy Masius Benton & Bowles, agency for common clients Procter & Gamble Co. and M&M/Mars, fell apart when an irate P&G nixed the union. Other agency chiefs wouldn't discuss talks with Mr. Saatchi. But those who know him say he is talking to everyone.

"Maurice never sends one person to do a job if he can send three," said a former Saatchi executive. "And usually none of the three knows about the other two."

John Perriss, chairman of Saatchi's own Zenith Media unit, said he would be happy to handle media buying for New Saatchi. West-ern International Media, a U.S. media buying company, has called at least one U.K. media buying group asking for Mr. Saatchi's phone number.

Mr. Saatchi won't do much to enrich his new agency's coffers even if he wins British Airways. While the business gives Saatchi & Saatchi credibility as a global network, it doesn't make money for the agency.

Another prestige account for the agency is that of Great Britain's Conservative Party, and one former insider estimates Saatchi writes off $400,000 to $750,000 in work for every general election.

Financial logic like that is what brought Mr. Louis-Dreyfus to Saatchi as chief executive in 1990.

Mr. Saatchi met Mr. Louis-Dreyfus back in the acquisition-mad '80s in the same way he met many people: He tried to buy Mr. Louis-Dreyfus' company. The Frenchman, who was the chief executive of IMS, a U.S. pharmaceutical market research company, instead sold the business to Dun & Bradstreet for $1.7 billion in 1988.

When Saatchi ran into serious financial trouble a few years later, Mr. Saatchi remembered Mr. Louis-Dreyfus and brought him on board. Mr. Louis-Dreyfus brought along as finance director his chief financial officer, Charles Scott, now Saatchi's chief executive.

In embarking on 16 arduous months of negotiations with Saatchi's bankers to save the company, one of the first things Mr. Louis-Dreyfus did was cut his salary by 40%, to $450,000. And as part of the financial restructuring in 1991, he led a $5 million investment by Saatchi managers to show confidence, investing $3 million of his own money.

A month before he left Saatchi in March 1993, Mr. Louis-Dreyfus set up, with other investors, a Luxembourg-based investment vehicle called Ricesa to buy a 5% stake in Adidas. Ricesa also held an option to buy the rest of the company by the end of 1994.

Since Mr. Louis-Dreyfus likes to work with friends, other Ricesa investors were the Saatchi brothers, who put in only about $10,000 for some share options; Thomas Russell, who was Mr. Louis-Dreyfus' chairman at IMS; and later, Saatchi board member Christian Tourres. Mr. Tourres, former IMS market research director, is a director of Adidas' executive board.

Last spring, Messrs. Louis-Dreyfus and Tourres bought another 13% stake in Adidas through investment vehicle Matinvest.

When the two were about to exercise their option to buy the remainder of Adidas, the Saatchi brothers struck. Last July, the brothers won a court order stopping Mr. Louis-Dreyfus and Ricesa from buying more Adidas shares without them.

Essentially, the Saatchis wanted to parlay their small stake into a sizable share.

To get rid of them, Messrs. Louis-Dreyfus and Tourres, Ricesa's biggest shareholders, negotiated the $40 million settlement in November. A month later, they exercised their option and bought the rest of Adidas.

While it may take a long time to find out just how the Saatchis were paid, it appears the confusion over Saatchi & Saatchi and New Saatchi may end soon. The holding company already is searching for a Saatchi-less name, and last week Saatchi & Saatchi Advertising Worldwide Chairman Edward Wax said he's asked the agency's board to weigh dropping the Saatchi name for the agency network as well.M

Melanie Wells in New York and Dagmar Mussey in Duesseldorf contributed to this story.

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