Bell Pottinger Middle East in discussions to sever ties with London
The regional branch is in talks with potential investors as it sets out to make a clean break under a new name
Bell Pottinger Middle East (BPME) has started proceedings to cut ties with its London-based parent as it faces administration proceedings this week.
“As a separate legal entity, BPME is not part of these proceedings and is therefore in a position to determine its own destiny,” the company said.
The UAE office will have two managing directors, Tim Falconer and Archie Berens, and director, Amy Piek, taking the helm. The trio is working on a proposal with the administrators of Bell Pottinger Private Limited, which would see the separation of BPME formalised and the ownership of the business transferred to its management.
“Once it became apparent Bell Pottinger Private Limited would be unlikely to continue as a going concern, we decided to go down this route,” Mr Berens told The National.
Until recently one of the world’s biggest PR firms, Bell Pottinger has put itself up for sale after losing clients for running a racially charged campaign in South Africa which has led to it being shunned by its peers.
As a result the firm’s second-biggest shareholder, Chime, has written off its 27 per cent stake and its chief executive and biggest investor have quit.
Co-founder Tim Bell, who resigned last year, said on Wednesday the agency was now “close to the end”.
“I think it’s very sad that something that I ran for years and years has been destroyed in less than a year,” he told Reuters.
The UAE team began discussions with London-based Bell Pottinger to spin off only a day after the Asian subsidiary made its move to independence.
BPME will follow its Asian counterparts, who announced on Friday that it would operate under the name, Klareco Communications, with a new ownership structure in place to serve its clients.
For now, BPME will remain the name of the Middle East entity until it is officially rebranded.
“As an independent and financially secure business with a strong and experienced team in charge of its own destiny, it will now be open to us to consider a whole range of options,” Mr Berens said.
The UAE office is in discussions with interested investors to help create a new brand under a different name. The 24-member staff represents clients in the UAE, Saudi Arabia and Oman, more than doubling its retained client base over the last three years.
The company is looking for up to a “handful of investors prepared to pay a fair price to help support the firm in its growth plans” adding new services, especially in the digital arena.
“As you would expect, there has been a significant level of interest in our business and we will consider each on their individual merits,” Ms Piek said. “However, we are clearly looking at those who share our vision and can add value. “
Bell Pottinger Private, which usually handles crises for clients, fell into a tailspin of its own when it was dismissed from the UK industry trade association following the South Africa scandal that erupted in July.
Bell Pottinger was connected to a campaign in South Africa for Oakbay, an investment company owned by the Gupta family. It targeted opponents for both the Guptas and South African president Jacob Zuma, evoking racial divides.
The Financial Times reported that accountancy firm, BDO, informed staff at Bell Pottinger’s London headquarters last week that the firm was likely going into administration, or insolvency, as early as Monday. BDO had been hired to help recruit a buyer for the battered PR agency, to no avail.
BDO’s press support, Infinite Global, responded to The National’s inquiry: “For reasons of confidentiality, BDO do not comment on business matters such as this.”
While high-profile clients have publicly left the UK firm, the UAE office said that it has been met with support from companies that it represents continuing “business as usual”.
Ms Piek said: “This is a very, very sad situation for our colleagues in London. However, in the UAE, we have a strong team, supportive clients and a bright future.”
Updated: September 10, 2017 09:59 AM