Activist investor pushing for M&C Saatchi break-up builds stake
A notorious activist investment firm has added to its stake in M&C Saatchi in a move that brings it a step closer to orchestrating a break-up of one of Britain’s best-known advertising companies.
Harwood Capital now owns more than eight per cent of the eponymous agency founded by advertising tycoons Maurice and Charles in 1995, according to a stock exchange filing, and is understood to harbour ambitions to push through a mass disposal the media group’s constituent parts.
The boutique investment firm began amassing a stake in the London-headquartered M&C Saatchi in 2020, but did not surpass the five per cent threshold that forced it to declare its holding until last year.
Since then, it has been steadily adding to its position, with its latest buying spree taking its stake above eight per cent for the first time. The fund is now pushing for the agency to kickstart a piecemeal sale of its various divisions – which range from lobbying and events management to traditional advertising and sports marketing – that it hopes will unlock significant value for shareholders.
The approach resembles the playbook Harwood employed with Centaur Media, the former owner of trade media outlets like The Lawyer, that completed a firesale of its portfolio companies earlier this year.
Centaur now owns just one firm, having returned nearly £65m to shareholders through the disposals under pressure from Harwood. The stripped back entity also quit the London Stock Exchange in April.
M&C Saatchi battles barrage of headwinds
Harwood’s offensive comes at a tumultuous period for M&C Saatchi, which has been forced to contend with a barrage of headwinds . The Aim-listed group’s shares have shed more than a more than a quarter of their valuation over the last 12 months, after the agency was swept up in a wider artificial intelligence-related sell-off of large advertising groups.
Meanwhile, the Iran war has threatened to upend its industry-leading sport and entertainment division’s growth in the Middle East and further dent earnings in the already softening UK market.
It has also faced several high-profile internal challenges, with former boss Zaid Al-Qassab standing down in April after less than two years at the helm. Major shareholder Vin Murria has simultaneously taken up a position on its board having previously spearheaded a £254m hostile takeover approach for the agency.
Any break-up would likely foreshadow the end of M&C Saatchi’s two-decade-long spell on London’s junior stock exchange, Aim, and mark the final chapter of one of Britain’s most recognised advertising agencies.
It was founded in 1995 by Maurice and Charles Saatchi – along with several other senior colleagues – after the pair left their first agency Saatchi & Saatchi in an acrimonious boardroom spat.
Harwood Capital was approached for comment. M&C Saatchi declined to comment.