Bates buyers circle as Cordiant reveals plans for demerger

A demerged Bates network has a year to prove itself as a successful global player or face a takeover threat.

A demerged Bates network has a year to prove itself as a successful

global player or face a takeover threat.



That was the verdict of analysts this week as the network’s Cordiant

parent announced the timetable for the demerger of its Bates and Saatchi

& Saatchi subsidiaries.



They dispute Cordiant’s assertion that healthy six-month profit figures

by the group have put Bates out of the price range of potential

bidders.



Lorna Tilbian, the media analyst at Panmure Gordon, said: ’I would argue

the opposite is true.’



Tilbian cited Bates’s recent losses, including Miller Brewing, Texaco

and the pan-European Compaq computers account, as serious threats to its

future independence. ’If anything, it’s a hidden profits warning,’ she

added.



Bob Willott, a partner in the accountancy firm, Willott Kingston Smith,

said Michael Bungey, the Bates Worldwide chairman, had a year after the

demerger to prove the network was a genuinely successful business.



A source at WPP, touted as a possible bidder, said: ’Bates seems to have

a for sale sign on it. We’d be interested but it is very expensive.’



Demerger details, p4.



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