Turmoil At M&C Saatchi As Board Quits, As Accenture Eyes Audacious $175 Million Takeover Bid
A tumultuous 2019 for the world’s biggest independent agency, M&C Saatchi, has seen Maurice Saatchi and three other non-executive board members quit their posts overnight.
Lord Saatchi (pictured below) – who founded the agency in 1995 – fell on his sword, along with other board members including Lord Dobbs, Sir Michael Peat and Lorna Tilbian.
Dobbs, a Conservative politician, is best known for creating the House of Cards novels, which were later turned into a TV series. Peat is a former accountant and former private secretary to Prince Charles, and Tilbian is a media analyst and stock broking executive.
There are now murmurings emanating from London’s city traders that Accenture Interactive could make a play for the agency. A ballpark figure of £90 million ($A175 million) has been mooted as a possible price tag – small change for Accenture – who’d no doubt prefer it at £70 million ($A135 million).
The big carrot for Accenture would be M&C Sport and Entertainment, M&C’s thriving marketing and sponsorship division. As creative increasingly struggles to pay the bills, sport and entertainment is proving increasingly lucrative.
Accenture buying M&C Saatchi would give it a significant leg-up into the space. Whether it bought M&C Saatchi outright or just made a play for just M&C Sport and Entertainment remains to be seen. Regardless, shareholders and the share price would no doubt welcome Accenture’s overtures.
It’s been a particularly tough year for the London-headquartered agency with its share price tanking from a year high of £4 ($A7.70) down to almost £1 ($A1.93) on the back of grim profit warnings.
In September, it revealed a slide in sales and profit for the first half of the year following a slew of client losses. Profit fell 67 per cent to £2.5 million ($A4.8 million).
Last week, the company warned 2019 profit would be “significantly below the levels expected”.
In August, PwC discovered a series of historical “misstatements” on its balance sheet tallying to £6.5 million ($A12.5 million). Something the company described as a “cock-up in the accounts department”.
M&C Saatchi operates in 30 global territories, including its second biggest market – Australia. B&T reached out to its Australian CEO Jaimes Leggett for comment, but had not received a reply at the time of publishing.
Following the departure of the quartet overnight, M&C Saatchi chairman Jeremy Sinclair issued a statement: “We have accepted the decision of these directors to resign. We are determined to restore the operational performance and profitability of the business and are already implementing all of the recommendations set out in the PwC report we announced last week.
“We had started a process to reconstruct our board with new independent directors. This new board will have a mandate to conduct a full review of all aspects of our governance.”
Chief executive David Kershaw, founding partner Bill Muirhead, chief financial officer Mickey Kalifa and finance director Andy Blackstone are still listed as directors on the firm’s website, alongside Sinclair.
The ongoing problems at its UK operations have forced the agency to begin a £2.5 million cost-cutting drive that will reportedly lead to significant job reductions. The UK operation employs about 840 staff, one-third of its 2600 global headcount. The cuts are expected to produce annual savings of about £6 million ($A11.5 million) in 2020 and onwards.
Russ Mould, investment director at AJ Bell, said of the board’s departure: “At a time when investors are making ever-higher demands of companies in terms of their corporate governance and how they are run, heads were always going to roll at M&C Saatchi after a run of profit warnings and revelations that accounting errors could date back over five years.
“Investors will now be hoping that a fresh approach in the boardroom will help chief executive David [Kershaw] and relatively new finance chief Mickey Kalifa with their root-and-branch review of the business and their efforts to turn around M&C Saatchi’s financial results and reputation.”
Latest News
DMARGE Founder Unveils Creator-Led Social Media Agency Feedstar
New creator-led social media agency Feedstar to be aimed directly at Gen Zs. Well, they'd hardly want print, would they?
TV Ratings (02/05/2024): A total of 1,753,000 Aussies Witness Port Adelaide’s Defeat
Seven's AFL numbers almost double that of the NRL last night. The NRL still easily winning for ruptured ACLs.
Hotglue Cashes In With La Trobe Financial Digital Media Account
Hotglue staffers learning their cashflows from their collaterals today after nabbing La Trobe Financial's digital media.
M&C Saatchi’s Sydney Creative Lead Exits
B&T's stopping short of calling it a revolving door at M&C at the present, but there's definitely heat on the hinges.
Taylor Swift’s Music Re-Enters TikTok As Universal Pens Landmark Deal
Yes, B&T may have spent 152 hours failing to get Taylor Swift tickets, but, as you'll read here, it's all behind us now.
HAVAS Red launches inaugural Influencer White Paper
Havas Red has debuted its first influencer white paper. Unless you print it out in colour, of course.
Two Sides Global Campaign Reports Increasing Greenwashing As Organisations Focus On Sustainability
New report confirms greenwashing's on the rise. Apparently Mars' 'work, rest & play' claims also under investigation.
Aruga Launches New HQ & Changed Ownership Structure
PR agency Aruga proves Brisbane is 'so hot right now'. So hot in fact, Adelaide's had to go on anti-anxiety meds.
Delicious & American Express Partner To Launch Month Out 2024 In Sydney
Cost of living got you eating noodles prepared in the two-minute style? Why not live vicariously through this.
Aussie Ad Market Continues Decline In March
The belt-tightening in adland shows signs of a turnaround soon. Bar the belt-loosening at the all-you-can-eat buffet.
VMA Focuses On Skills And Training For Members
If there was a post-COVID hangover (bar the anti-vax ranters) it was the rise in skills shortages. Here's another one.
Nearly 90% Of Consumers Want Transparency About AI Images, Finds Getty Images Report
Study finds consumers want transparency around AI images. Couldn't care less about photoshopped magazine covers.
The National Breast Cancer Foundation Partners With VML To Boost Funds
Anyone else feel we've exhausted the office morning tea for cancer? B&T proposes the office moonshine still instead.
Perry ‘Pez’ Lazaris Named New National Hit Network Announcer
Why is it mandatory for the media to only publish the nicknames of people in radio & underworld crime figures?
Before Adland: Garry Dawson’s Journey From Teacher To Marketer
Here, the Hopeful Monsters marketer talks his shift from the classroom to the room wherever marketers congregate.
Scott Cam Urges Tradies To Prioritise Sun Protection
The Block host promoting sun protection to tradies. Also, don't try getting into the RSL after 6pm wearing high viz.
PubMatic Study: Advertising On Retail Media Is 50% More Effective Than Social Media
New study finds retail media 50% more effective than social. B&T says two-for-one Tim Tams trumps the lot.
From MOWING to life GROWING: Jim Penman launches ‘Life Coaching’ services
Can't decide on getting the hedges trimmed or finding a deeper meaning to life? You're in luck with this new venture.
Budweiser Brazil Turns Songs That Name Drop The Iconic Brand Into Spotify Ads
It's strange that Budweiser never found a market among beer-swilling Aussies. Then again, neither did the fluffy duck.
Effie Worldwide Strengthens Board With 6 New Members
B&T hopes everyone's wearing their Maseur sandals at the Effies, as it's standing room only at the next board meeting.
Special Enlist A Penguin Named Nigel In Latest Energy Campaign For Contact
Special unveils Nigel the penguin in work for energy provider Contact. Apparently Percy the peacock was booked.
Anya Taylor-Joy, Chris Hemsworth & George Miller Ignite Sydney For Epic Mad Max Launch
The Mad Max film franchise is Australia's cinematic gift to the world. That & Chris Hemsworth's near perfect cheekbones.
IAS Launches First-To-Market Integration With Roblox To Provide 3D Immersive Measurement
Always thought you could do with better 3D immersive measurement? Happy days are ahead here.
Fast And Furious: Top Gear Australia Launch Thrilled Motorheads, Car Entusiasts And Guests
B&T is still no closer to knowing who the new Stig is, except that she is a woman and a ridiculously fast.
TV Ratings (02/05/2024): Seven’s The 1% Club Wins The Night
The 1% club did not live up to its name when it comes to TV ratings last night.
TRA Welcomes Raft Of New Hires; Bolstering Expertise Across Markets
Insights and research agency TRA announces slew of new hires. Still no news on the return of marble wash denim, however.
CX Lavender Hires Boston Consulting Group’s Kim Verbrugghe as Chief Strategy Officer
CX Lavender announces new strategy hire and channels 'acoustic folk act at local RSL' for the publicity pic.
Opinion: Community standards, will they be the death of us?
This columnist is talking community standards. Sadly not those people who put dogs in trolleys in supermarkets.
Tegel gets heads bobbing with new free-range chicken platform
Sure, there's a lot of moral considerations when buying a chook. Yet, not as baffling as buying eggs or canned tuna.
Study: 66% of Aussie men believe masculinity is under attack
Two-thirds of Aussie blokes say masculinity's under attack. That said, sales of Solo lemon drink appear robust.
‘Equal Writes’: Canyon reveals new campaign and refreshed brand for women and non-binary writers
As this brand redesign again proves, nothing beats black on white. Well, white on black in this instance.
Icon Agency bolsters consumer and integrated offer with major hires
Icon Agency unveils new recruits. As press photo confirms office moustache competition now a lay-down misère.
Clemenger launches agricultural graduate program
Has Farmer Wants A Wife triggered an interest in dagging & hay balers? This grads program may resonate.
Levi’s Appoint UM As Global Media Agency For $217m Account
Levi's are the jeans for rockstars, models & the cool kids. Although that's not stopped dads from ruining their image.
QMS Nabs Sean Rigby From oOh!media
Things set to get spicy at the next Outdoor Media Association dinner and dance as a rival gets poached.
Bumble Reveals New Brand Identity To Usher In New Era Of Dating
It's ironic that all the dating apps market themselves as having no weirdos, freaks or mummy's boys like their rivals.