Advisers spin £195m tie-up

THE public relations industry saw another tie-up today after City spinners Incepta Group agreed an all-share merger with rival Huntsworth.

The deal creates an international marketing and communications group with a market value of £195.4m and a host of big-name clients, some 58 FTSE 100 companies and 142 Fortune 500 companies.

The companies said that the merger would give the combined group much more clout and greater international presence. Future growth will come from cross-marketing the group's brands and services to each of the company's existing clients, they said.

Substantial cost savings of about £2.5m are likely to be achieved following the merger and a wide-ranging strategic review is to start shortly. The business is also to be renamed.

News of the tie-up comes just four months after it emerged that Incepta and Chime had held talks over a possible tie-up. The talks foundered amid disagreement over the likely price to be paid by Incepta.

Huntsworth and Incepta said today that discussions had been going on over the past year.

Under the terms of the deal Huntsworth shareholders will hold 32.8% of the business, exchanging their existing shares for new Huntsworth shares on a one-for-one basis. Incepta investors will make up the 67.2% balance and get 313.6 new Huntsworth shares for every 100 Incepta shares they hold.

Following the completion of the merger, Lord Chadlington will become executive chairman of the group, Richard Nichols will become chief executive and Roger Selman will be finance director until after completion of the strategic review when a replacement will be sought.

Chadlington will remain committed to the group on a full-time basis until at least the end of 2008. Francis Maude and Jon Foulds will be joint deputy chairmen.

There was good news for Anthony Carlisle, widely seen as one of the City's top financial spin doctors. Currently a director at Incepta's financial PR firm Citigate Dewe Rogerson, he will now become adviser to Chadlington on the development of the firm's worldwide financial and corporate communications practice. Carlisle will retain his existing client responsibilities.