Chime Communications board okays GBP365M cash offer

Chime Communications plc shares on London Stock Exchange (LSE) soared to 361 pence per share on Thursday as the board approved the GBP365 million takeover offer from Providence Equity Partners and WPP.

The London-based Chime Communications shares rose by more than a quarter ever since the takeover news spread in the market. Chime Communications needs new capital to strengthen its operations for business expansion in the global sports marketing segment.

Providence Equity Partners and WPP are offering not only new capital, but also industry expertise to further strengthen the business operations.

The offer entitles shareholders of specialist sports marketing business major to 365 pence per Chime share and an interim dividend of 2.53 pence per share for the current year.

Providence Equity Partners is a private equity firm and WPP is a marketing powerhouse. Both firms have keen interest in sports marketing business segment.

Business analysts considers the deal as reasonable for shareholders, but cautions about uncertainty in case another party might become involved given sports attractions.

Chime Communications has been a major success in the global sports marketing industry and as a result the company is able to offer attractive dividends to its shareholders. Chime Communications stock was hovering below 305 pence per share until this month before the takeover news hit the market.

Independent committee of board of Chime Communications has been set up to discuss the cash offer from Providence Equity Partners and WPP. The board has been convinced with the offer considering the company's requirement of new capital for the business growth.

Lord Bell, Margaret Thatcher's former public relations guru, set up Chime Communications in 1989.

Chime Communications had played a major role in the recently-held major sports events. The company also owns CSM Strategic, headed by Lord Coe. It actively involved in London Olympics, the Rugby World Cup, the Commonwealth Games and Fifa.

Earlier, Chime Communications had sent a letter to London Stock Exchange stating that "there can be no certainty" that the offer will be made. However, Chime Communications stock soared by 25.8% or 70.75p to 345.25p resulting in valuation of GBP347.5million.

Former UK Trade Minister Lord Davies is Chairman of Chime Communications. Lord Davies is also former Chairman of Standard Chartered. Chime Communications owns 56 agencies around the world and has over 2,000 employees on rolls from Singapore to Brazil.

The stock price on Thursday closed at 361p a share registering a net gain of 15.75p or 4.56%. The stock touched day's high of 363p and low of 360p in total day volume of 5,584.422 shares.

Chime Communications' stock was showing year's high of 345.25p and low of 242.25p a share.