REG - M&C Saatchi PLC - Disposal 20% of Australian subsidiary

Released : 25/03/2010 07:00

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M&C Saatchi PLC
25 March 2010 
 
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: 
 
 M&C Saatchi PLC                      +44 (0) 207 544 3693  
 David Kershaw, Chief Executive                             
                                                            
 Numis Securities                     +44 (0) 207 260 1000  
 Adam Joy / Brent Nabbs, NOMAD                              
 Charles Farquhar, Corporate Broking                        
                                                            
 Tulchan Communications               +44 (0) 207 353 4200  
 Susanna Voyle                                              
 Tom Rayner                                                 
 
 
Susanna Voyle 
 
Tom Rayner 
 
This information is provided by RNS
The company news service from the London Stock Exchange