MBO bid for financial PR firm expected shortly

A management buy-out (MBO) of Financial Dynamics, one of the largest financial public relations firms in Britain and Ireland, is expected shortly.

Among the management team mounting the bid is Mr Declan Kelly, a director of Financial Dynamics Ireland. Two-and-a-half years ago, along with Mr Jackie Gallagher, he sold the public relations firm Gallagher & Kelly for €15 million to Financial Dynamics.

Mr Kelly is believed to be among a management team preparing to buy the firm from its parent group, Cordiant, which is carrying huge debts.

Cordiant has been forced to sell several assets because of the severe recession in the advertising industry worldwide. The management team is expected to buy Financial Dynamics for about £20 million sterling (€29 million).

Also believed to be among the MBO team is Financial Dynamics's British chief executive Mr Charles Watson and non-executive chairman Mr Tony Knox. The company is regarded as one of the biggest public relations firms in Britain while, in the Republic, Vodafone and Dell are among its clients.

In recent years, several leading public relations practitioners have joined the firm, including the former director of communications with Fine Gael, Mr Niall O'Muilleoir. The current managing director of the Irish firm is Ms Orla Branigan, formerly of Flexicom.

Financial Dynamics worldwide has gone through several upheavals over the past decade. It started out as a wing of advertising group Grayling, but a management team bought it out.

Soon after that, it was sold to Broad Street Associates for £5.2 million. A number of MBOs and then disposals followed, leaving the firm in the ownership of GGT. However, two years later, another MBO was completed.

Barely a year later, the firm was sold again, netting the shareholders a large profit. The firm was then bought by US group Lighthouse Holdings for an estimated £40 million, a price that came as a surprise to many.

Cordiant bought Lighthouse in 2000 for £259 million. However, in January 2002, Cordiant had ousted the firm's two most experienced staff, Mr Nick Mioles and Mr Hugh Morrison. This action sparked months of legal disputes.

During all these changes the share price has also experienced mixed fortunes. In March 2000 the shares were worth 406p, but earlier this week were trading at just 27.5p.