Saudi quits Saatchi for princely profit

Saudi Prince Al-Waleed Bin Talal Bin Abdulaziz Al-Saud, one of the world's richest private investors, has sold his 5 per cent stake in Saatchi & Saatchi for cash, rather than take shares in the company's bidder, French advertising group Publicis.

The Prince has held the stake since at least March 1998, when he declared an interest in 9.3 million shares representing 4.17 per cent of the advertising company. He built on this and until last week held 5.51 per cent.

The billionaire Prince is known to be a shrewd investor. Among other investments, he has £434 million ($1.4 billion) invested in eight internet and technology stocks. He bought Apple Computer and Citigroup when others were selling out and substantially increased his wealth in the process.

His timing seems to be equally good with Saatchi. No details of the exact date he sold are available, but the company was informed on August 18, the day after the share price hit its all-time high.

So it is quite likely he sold at the very top of the market.

On this basis, the Prince would have pocketed more than £56 million. Taking the share prices at the times his purchases were declared, this works out at a profit of roughly £41 million.

However, it seems the Prince's shareholding goes back beyond the 1998 announcements. Reports in 1997 suggested he had a £25 million stake in Cordiant, the advertising group that split into two quoted companies: Saatchi & Saatchi and Bates, plus Zenith Media Worldwide.

So the Prince's profit might be closer to £30 million.

The sale seems to indicate that the Prince is not impressed by the Publicis offer, approved by shareholders last Wednesday.

The offer valued Saatchi at 500p a share when it was made, but the price will be paid in paper at a ratio of 1.64 Publicis shares for every 100 Saatchi shares. At current rates, that values Saatchi shares at about 410p - 35p below the market rate.

For whatever reason, the Prince seems to prefer cash.

- INDEPENDENT