Creston buyout falls victim to downturn

by Daniel Farey-Jones, Brand Republic 13-Oct-08, 09:55

LONDON - Buyout talks between marketing services group Creston, owner of ad agency DLKW, and a private equity firm have broken down.

Creston issued a statement to the stock market this morning saying discussions had ceased and that it is not in talks with any other party.

It said new business activity "continues to be positive".

Creston's board revealed on September 15 that the unnamed private equity firm had got to the final stages of due diligence and arranging finance for the buyout, which would have signalled the involvement of chief executive Don Elgie and chief financial officer Barrie Brien.

However, in the weeks since that announcement, the turmoil in the financial markets has accelerated.

Creston's share price has dropped 1.89% this morning to 39p, from a high of 58.75p in late September following the news of the buyout proposal.

Creston owns 12 marketing companies, including ad agency DLKW, market research firms CML Research and ICM Research, and direct agencies Tullo Marshall Warren and The Real Adventure Marketing Communications.

The breakdown mirrors the collapse of talks last Friday between Beattie McGuinness Bungay and Omnicom over the sale of BMB to TBWA and its merger with the network's London office.