Saatchis Prepare to Make Their Stock Market Comeback ; BUSINESS ANALYSIS Advertising Gurus Who Packaged Mrs Thatcher to Seek AIM Listing for New Agency

By Mesure, Susie | The Independent (London, England), March 26, 2004 | Go to article overview
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Saatchis Prepare to Make Their Stock Market Comeback ; BUSINESS ANALYSIS Advertising Gurus Who Packaged Mrs Thatcher to Seek AIM Listing for New Agency


Mesure, Susie, The Independent (London, England)


CHARLES AND Maurice Saatchi, the advertising gurus who put the "ism" into Thatcherism, have long been renowned for believing in the impossible. Which may explain yesterday's shock news that they intend to seek a stock market listing for their advertising group M&C Saatchi, spawned less than a decade ago after one of the most colourful City bust-ups of all time.

A flotation, scheduled for this summer, would bring the brothers full circle since they were unceremoniously ousted from Saatchi & Saatchi, the company they founded in 1970 and which went on to create some of the most iconic advertising campaigns of the 1980s.

Then, they were hounded out by the City in an early example of shareholder rebellion; now, they want institutional investors to bankroll their expansion into continental Europe.

M&C Saatchi, the agency behind slogans such as "The world's favourite airline" and "Australians wouldn't give a XXXX for anything else", is planning to raise pounds 10m from selling a minority stake in a stock market listing that would value the group at about pounds 75m. The five founding partners, all former Saatchi & Saatchi men, would retain a "significant majority stake", David Kershaw, the chief executive said. The five - Charles and Maurice, Mr Kershaw, Jeremy Sinclair and Bill Muirhead - share 75 per cent of the company, while senior managers hold the remainder.

Although neither Charles nor Maurice has much to do with the day- to-day running of the business - Charles is too busy championing young British artists, while Maurice co-chairs the Conservative party - both remain synonymous with the company that marks their rise, Phoenix-like, from the ashes of a career that many would have long since abandoned. The pair seemed destined for disaster when their Saatchi & Saatchi empire met a sticky end in the mid-1990s, brought down by a fatal combination of hubristic greed and the after effects of Black Monday.

Fittingly for the duo who are credited with helping the Tories win four elections - most memorably in 1979 with their "Labour isn't working" image of dole queues - and coining what became known as Thatcherism, their Thatcherite appetite for growth was their downfall.

Not content with owning 37 companies by 1986 and topping the global advertising league, they set their sights on creating a global integrated business services empire. In 1987, months before the stock market crash, they attempted to bid for Midland Bank. Their Nero-like improvidence, which meant they thought little of spending pounds 70m on a one-off payment to have Saatchi & Saatchi emblazoned in enormous letters on the side of their Berkeley Square base, where they occupied a single floor, meant they wanted to rule the world. Their move for the bank, now part of HSBC, was laughed out of town.

The collapse of the Saatchi & Saatchi share price meant the mountain of debt the brothers had amassed during their global acquisition spree grew too much for shareholders to stomach. It was certainly too much for one, Chicago-based David Herro, who (some claim) along with Robert Louis- Dreyfus, the then head of Adidas and a former chief executive of Saatchi & Saatchi, spearheaded the revolt that presaged the brothers' departure. Maurice left first, in January 1995, after the Saatchi & Saatchi board objected to his generous remuneration package.

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