Key facts
- Activist investor Harwood Capital predicts M&C Saatchi will be broken up within a year.
- Harwood Capital founder Christopher Mills believes a piecemeal sale of the advertising group is likely.
- Mills cited the recent appointments of Nicholas Shott and the return of Vin Murria to the board as signs of a "corporate solution".
- M&C Saatchi has struggled with performance and announced cost-saving measures.
- The company's CEO, Zaid al Qassab, left in March.
- Harwood Capital holds over 8% of M&C Saatchi.
M&C Saatchi, one of Britain's prominent advertising groups, is facing pressure from activist investor Harwood Capital to break up. Christopher Mills, founder of Harwood, predicted that the company will cease to exist in its current independent structure within the next year, suggesting a piecemeal sale of its various agencies.
Mills indicated that recent changes to M&C Saatchi's board, including the appointment of investment banker Nicholas Shott and the return of investor Vin Murria, signal a move towards a "corporate solution" for the firm's ongoing performance challenges. Harwood Capital, which has been steadily increasing its stake and now owns over eight percent of the Aim-listed company, previously oversaw the break-up of publisher Centaur Media.
The advertising group, founded in 1995, has been working to improve its financial performance, including targeting £12 million in annual cost savings. However, its turnaround efforts were recently disrupted by the abrupt departure of chief executive Zaid al Qassab in March after less than two years in the role. The company has not yet appointed a successor.
A break-up would signify the end of M&C Saatchi's 20-year tenure on London's junior Aim stock exchange and the potential disappearance of a well-known British advertising brand, established by Charles and Maurice Saatchi after they left their original agency.