PR firm Financial Dynamics in €36m buyout

Former journalist and co-founder of Gallagher & Kelly Public Relations, Mr Declan Kelly, is among a management buyout group which is believed to have purchased the PR firm Financial Dynamics International for £25 million sterling (€36 million).

WPP Group, the UK advert- ising company, yesterday won the battle for Cordiant Communications with a recommended offer valuing its rival's debt and equity at £266 million. Financial Dynamics is part of the Cordiant group of companies, but is not being sold to WPP. An announcement is expected in the next few days. Financial Dynamics has offices all over the world, including Dublin. It is expected that some of the Dublin staff will get shares in the newly owned company.

Leading the buyout are senior Financial Dynamics staff from London, including Mr Tony Knox and Mr Charles Watson.

The Cordiant takeover will put WPP in a strong position to overtake Interpublic as the world's second-largest advertising group by annual revenues, trailing only Omnicom.

Lenders, apart from a recalcitrant US investment fund, Cerberus Capital Management, have been bought out at par, but shareholders will receive only a token payment in WPP shares.

The takeover marks a triumph for Sir Martin Sorrell, WPP's chief executive. It will strengthen his group in several important business areas, including marketing services such as in-store promotion, and in Asia and Latin America. It also prevented Cordiant from falling into the hands of French rival Publicis, which had hoped to split its assets with Cerberus after putting it into administration.

Alone of Cordiant's lenders,Cerberus is keeping its £79 million of debt. As a result, the US fund retains a strong bargaining position as WPP moves to integrate Cordiant. WPP's offer requires approval of a scheme of arrangement by a 75 per cent vote of shareholders in a court-administered meeting. If it succeeds, the vote will be binding on all shareholders, removing the possibility of minority hold-outs.

Returning after a three-day suspension, Cordiant closed 1p lower at 2p. Cordiant investors face a loss as the WPP offer values its shares at lower than they had ever traded. - (Additional reporting, Financial Times Service)