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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