New Saatchi & Saatchi born of Cordiant ashes

Siegel & Gale and Saatchi & Saatchi Design are to be owned by the new Saatchi & Saatchi advertising group once the demerger of parent group Cordiant is agreed.

Announced on Monday, the three-way split of Cordiant is designed to realise what Cordiant chiefs believe is 300m of hidden value in the group. The group’s share price values Cordiant at around 577m, but the demerged companies – principally the advertising networks Saatchi & Saatchi, Bates and Zenith Media – could be worth up to 900m in total.

The main thrust of the split is to create two quoted groups – Saatchi & Saatchi and Bates – which will each own half of the Zenith Media group.

City speculation suggests Cordiant’s design consultancies and its public relations companies are too small to be floated separately. A Cordiant spokesman confirms that this option was not even considered.

The retention of Saatchi & Saatchi Design within the new Saatchi & Saatchi group is no surprise. Siegel & Gale’s inclusion – as a New York-based consultancy within what will be a UK-listed group – may be related to Cordiant chief executive Bob Seelert becoming chief executive officer of the new Saatchi & Saatchi group.

The Cordiant spokesman says: “Siegel & Gale is something that Bob has taken a particular interest in, and it naturally falls there.”

The new Saatchi & Saatchi group will employ around 4400 people and its constituent companies last year had revenues of 360m. Cordiant chairman Charlie Scott will be non-executive chairman of both new groups for one year before relinquishing one of the roles.

Further details of the demerger will go to shareholders in September, with the required extraordinary general meeting scheduled for October and dealings in the new groups expected by December.

No one at Siegel & Gale was willing to comment on the demerger or its implications for the corporate identity and new media consultancy.