By Aastha Agnihotri
(Reuters) - WPP Plc (L:WPP), the world's largest advertising group by revenue, has teamed up with U.S. buyout firm Providence Equity Partners LLC to buy Chime Communications Plc (L:CHW) and make a big push into sports marketing.
Chime said Providence and WPP would pay about 374 million pounds ($584 million) for the company founded by Margaret Thatcher's former media adviser, Lord Bell.
The offer price is at a 33 percent premium to Chime's closing price on Wednesday, the day before the company revealed it was in talks. Chime's shares were trading at 361 pence at 0910 GMT on Friday, slightly below the offer price of 365 pence.
" ... To fulfill Chime's considerable growth potential, significant new capital is required," Chime Chairman Evan Mervyn Davies said in a statement.
"Providence and WPP offer Chime both the capital and the industry expertise to fast-track our ambitions to build a full scale, global sports marketing and communications business."
WPP boss Martin Sorrell has built his company from nothing into one of Britain's best-known firms, with more than 179,000 employees in 111 countries. The company owns brands such as JWT and Ogilvy & Mather.
WPP already owns a 20 percent stake in London-based Chime, which derives a significant proportion of its business from big sporting events, including the Olympics and the FIFA World Cup.
Olympic gold medallist Sebastian Coe, who led London's successful bid for the 2012 games, is a Chime director. The company bought his consultancy business almost three years ago.
"WPP needs to build its position in the sports market and therefore this is a strategic asset," said Simon Davies, analyst at Canaccord Genuity.
Asset management firm Providence, founded in 1989, manages more than $40 billion in assets and has invested in sectors such as advertising, sports and entertainment.
The offer from Providence and WPP includes an interim dividend of 2.53 pence per share.
Moelis & Company and HSBC are financial advisers to Chime. Numis Securities is acting as broker to Chime. Robey Warshaw is advising the buyout consortium.