The standalone independent advertising business will be run by a new corporate entity, which on completion will be owned by Electra European Fund LP and Scholz's management.
This deal represents the second step in Cordiant's stated plan to reduce debt through a programme of non-core asset disposals. The sale of its financial PR business to a management team for around 拢25m is also expected to be completed shortly.
The sell-off, being overseen by Cordiant chief executive David Hearn, follows reports at the weekend that WPP is set to launch a 拢100m bid for Cordiant, beating out Publicis Group and another bid from investment firm Cerberus.
It follows the 70% sell-off recently of Cordiant's Australian advertising business, which included the agency George Patterson Bates.
The cash proceeds payable to Cordiant will be used to repay debt. A charge of 拢1m may become payable in March 2004 dependant upon the performance of Scholz for the year to December 31 2003.
Scholz has offices across Europe and, as well as advertising services, offers a range of marketing activities including programming, interactive, design, sponsorship, entertainment, trade marketing, consulting, public affairs, CRM, promotion, event/trade shows and public relations.
In the year ended December 31, Scholz generated revenues of 拢43.5m and pre-tax profits of 拢2m.
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