Bell Pottinger in administration

A spokesman for Bell Pottinger has confirmed it has hired BDO to evaluate options for the business, including a potential sale, in the aftermath of a South African political scandal in which it was embroiled, according to Reuters, citing an email from the company.

The news comes soon after it was learned that both its second-largest shareholder, Chime, and European banking giant HSBC have apparently cut all ties to the British public relations firm since its role in the presidential campaign of incumbent Jacob Zuma.

After accusations from primary South African opposition party the Democratic Alliance that the campaign purposefully inflamed racial tensions, the Public Relations and Communications Association (PRCA) recently expelled Bell Pottinger for a minimum of five years.

Although the firm has apologised for its part in the campaign, it is now arguing against the PRCA ruling.

Bell Pottinger, headquartered in London, was founded in 1987 and now employs more than 240 staff worldwide.

The company became a partnership in 2012, following a management buy-out in which Chime sold a stake.

Co-founder Tim Bell has claimed in a phone call to Reuters that the business is now “close to the end”.

According to the news provider, Bell Pottinger’s chief executive and biggest investor have both quit and other companies to have distanced themselves from the business in the wake of the scandal include Investec, Acacia, Richemont, Carillion and CYBG.

Zephyr, the M&A database published by Bureau van Dijk, shows that there have been only eight deals targeting UK PR agencies announced so far in 2017, including a USD 1.08 million capital increase by Redleaf Polhill in June.

The seven other transactions did not have disclosed values and included the acquisitions of Glue PR and The Lexis Agency by W Communications and Text100, respectively.

© Zephus Ltd

Read More