WPP ups stake in Chime

Global advertising giant WPP is slowly increasing its stake in smaller rival Chime Communications, the public relations, advertising and communications group chaired by Lord Bell, said to be Margaret thatcher's favourite public relations man when she was in her iron-booted pomp.

WPP has increased its stake in Chime to 15.54m shares, representing around 19.14% of the issued share capital. Prior to Wednesday's announcement WPP's stake hovered below 18%.

The move could be part of a plan to stymie plans by Lord Bell to buy some of Chime's public relations units which include Public Affairs, Sans Frontieres, Pelham Bell Pottinger and Issues & Crisis.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Sir Martin Sorrell, head honcho at WPP, is reportedly not a fan of a buy-out, having told London's Evening Standrd that such a deal "would set a terrible precedent" for Chime.

"It isn't logical, and if you start to dismember the management of it, where does that begin and where does that end?" Sorrell asked the Standard.

"As an investor in the company, one would rather it stayed together than split asunder," he added.

Public Relations represented 42% of Chime's operating income in 2011, down from 49% in 2010.

jh