Disposal 20% of Australian su
25 March 2010
M&C SAATCHI PLC
("M&C Saatchi" or the "Company")
M&C Saatchi to sell 20% of its Australian subsidiary M&C Saatchi Agency Pty Ltd to local management
M&C Saatchi is pleased to announce that it has agreed to sell 20% of the issued ordinary shares in its wholly owned Australian subsidiary M&C Saatchi Agency Pty Ltd (the "Australian Group") to local management, Tom Dery and Tom McFarlane (together the "Purchasers"), for a total consideration of AUD5m (the "Transaction"). The consideration will be satisfied by AUD 1m in cash, with the balance (AUD 4m) to be satisfied by a loan from M&C Saatchi to the Purchasers, repayable if the Purchasers no longer have a beneficial interest in the shares of the Australian Group (the "Loan"). The Loan, which is denominated 50% in Sterling and 50% in Australian dollars, is unsecured and is at the Bank of England's base rate of interest; interest on the Loan compounds annually and is payable on repayment of the Loan.
The Board believes that the Transaction will further incentivise and secure the Australian Group's outstanding team who have produced another excellent set of results for the year ended 31 December 2009. It is in line with M&C Saatchi's long-established and successful strategy of driving growth by incentivising local management teams.
Under the terms of the Transaction, the Purchasers have the option to acquire additional shares in the Australian Group, up to a further 20% stake, based on achieving certain demanding growth targets over the next three years ("Performance Incentive Shares"). From 1 July 2015, the Purchasers are able to exercise put and call options to M&C Saatchi in respect of their 20% stake in the Australian Group and any Performance Incentive Shares. The Purchasers are subject to a non-compete undertaking whilst they are shareholders in the Australian Group and for a three-year period thereafter.
The Australian Group is the holding company for M&C Saatchi's advertising and marketing activities in Australia. It was founded in 1995 by M&C Saatchi, Tom Dery and Tom McFarlane. In the year ended 31 December 2009 the Australian Group made a profit before tax of AUD4m and as at 31 December 2009 had net assets of AUD7m. Tom Dery is currently the chairman of the Australian Group and Tom McFarlane is a director; following completion of the Transaction, Tom Dery & Tom McFarlane will each own 10% of the Australian Group.
M&C Saatchi's directors, having consulted with Numis Securities Limited, consider the terms of the Transaction to be fair and reasonable insofar as M&C Saatchi's shareholders are concerned.
David Kershaw, Chief Executive of M&C Saatchi, said:
"Tom Dery and Tom McFarlane have led the development of a superb business in Australia, and have consistently outperformed the market. This deal will be mutually beneficial for both sides, as it will further incentivise an outstanding management team. Local ownership and highly incentivised management teams have always been at the heart of M&C Saatchi's corporate philosophy and we look forward to many more years of growth."
The Transaction is scheduled to complete today.
For further information, please contact:
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M&C Saatchi PLC |
+44 (0) 207 544 3693 |
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David Kershaw, Chief Executive |
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Numis Securities |
+44 (0) 207 260 1000 |
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Adam Joy / Brent Nabbs, NOMAD |
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Charles Farquhar, Corporate Broking |
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Tulchan Communications |
+44 (0) 207 353 4200 |
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Susanna Voyle |
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Tom Rayner |
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This information is provided by RNS
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