Shares fell by almost 75 per cent last Thursday, leading to calls by bankers for the sale to be pushed through of HHCL & Partners to WPP. HHCL would then be merged with WPP's Red Cell.
However, the deal is now on a knife-edge because Chime's bankers are pushing for an all-cash sale; Sir Martin Sorrell, the group chief executive of WPP, which owns 20 per cent of Chime, is said to want an all-paper deal given the economic climate.
Chime has denied reports that it is under pressure to abandon the original plan of an equity swap. However, Chime is said to need the money to improve its financial state; the share collapse came after £12 million of restructuring costs forced it to announce it had broken one of its banking covenants.
Lord Bell said this week: "Negotiations and discussions about HHCL are not changed by the statement we made."
Meanwhile, Chime sources also say no final proposition has been put to the company by WPP and it is still possible the deal could fall through.
Frustration at the time being taken to complete the takeover is also growing among Red Cell chiefs, who are warning that they may have to explore other options unless it is concluded by early next year. Red Cell senior managers are anxious that Sorrell and Bell should reach agreement without a further delay, which they fear will damage their business prospects.
"We have very significant international opportunities with a number of clients which we can't take up because we don't have the necessary critical mass in London," one said.
"We really want to do this deal because HHCL is a hell of a good fit for our network and a natural one given the existing relationship between WPP and Chime. But there are two or three other options in London we could explore," the Red Cell source added.