Cordiant sells City PR group FD International for £26m

LONDON - Cordiant has finally sold its City PR group FD International for £26m, more than had been expected, to a management team backed by global private equity firm Advent International.

The sale was delayed by Cordiant's financial problems and the collapse of its share price, as well as the machinations surrounding the ad group's future.

The long-talked-of buyout, led by FD International chief executive Charles Watson, was originally thought to be ready to be signed in May with a price tag of £25m, which some in the industry expected to fall.

The price represents a multiple of just five or six on FD International's pre-tax profits, which are estimated at £5m.

The deal with Advent International, which also backs music chain HMV, is payable in cash at completion and is subject to upwards or downwards adjustment based on a completion statement.

In a statement, Cordiant said that the sale of FD International, which was formerly known as Financial Dynamics, represents the final step in Cordiant's stated plan to reduce debt through a programme of non-core asset disposals and will be used to repay borrowings.

FD International is a pan-European and North American business specialising in financial and corporate public relations, investor relations, employee and integration communications, crisis and issues management, media and presentation training and corporate reporting.

As well as presence in the UK, FD International has operations in Ireland, France, Germany, and Greece and through affiliates in Italy and Sweden. In the US, FD International has operations in New York, Boston and San Francisco.

In the year to December 31 2002, FD International reported revenues of £33.9m and profit before tax of £3.7m.

In its statement, Cordiant said that the disposal of FD International is not expected to have an operational impact on any other part of the group.

"FD International's synergy with the Bates Group is minimal. FD International has few customer relationships in common with the Bates Group and is independently located and operated," Cordiant said.

Cordiant will seek shareholder approval for the sale at a meeting expected to be held on July 23, immediately before the meetings that are due to consider the proposed acquisition of Cordiant by WPP Group.

Last week, Active Value continued to increase its stake in Cordiant throughout the week, taking it to 28.75% by Friday, with the battle for the advertising group taking another twist as a woman who bought a 2% stake in Cordiant was revealed as Syrian billionaire Nahed Ojjeh.

Ojjeh is known for her passion for chess and is not known to have any previous connection to Cordiant.

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