It's just six months since the Irish public relations world - not to mention their former colleagues in this newspaper and the Irish Examiner - were astonished (and envious) at the price British media group Cordiant paid Jackie Gallagher and Declan Kelly for their one-year-old public relations company. By now, however, the dynamic PR duo must be wishing they got some cash from Cordiant instead of a bundle of shares.
When the deal was done last April, Cordiant shares were trading at a very tidy 252p sterling and that valued the 2.2 million shares Messrs Gallagher and Kelly shared for their company at a phenomenal £5.6 million sterling. They also had an earn-out that could earn them a further £5 million if targets were met.
Sadly, Cordiant shares have gone pear-shaped and, after a profits warning this week, they are trading at just 90p sterling. This currently values the duo's 2.2 million Cordiant shares at less than £2 million - assuming there was a lock-in that prevented them selling the shares for a specified period.
That's a £5 million fall in value since Gallgher & Kelly did their deal with Cordiant, but remember the earn-out part of the deal remains intact.
Is it any surprise that London analysts blamed some of Cordiant's problems on over-generous acquisitions? In Gallagher & Kelly's case, the company had built up an impressive client base and were well-regarded - but it still was only trading for a year before Cordiant came waving its big chequebook.
At its current level, the betting in parts of the market is that Cordiant will become a takeover target once the blood-letting that will see more than 1,000 jobs go is completed.
French media giant Publicis has been mentioned in despatches as one potential bidder for Cordiant.
Others believe that there is little upside for the shares until there is an uptake in the world advertising market - and that seems unlikely until it is clear that the US economy is on the mend.
Taking shares as payment is always a risky business for anybody selling their company. But with PR companies' only real assets being their people, Cordiant obviously wanted to lock in Declan Kelly and Jackie Gallagher for a reasonable period before they could sell their shares.
Maybe women executives are more astute when it comes to demanding cash when they sell out! Remember Carol Moffett getting £18 million for Moffett Engineering Powerscreen (RIP) before the Matbro scandal lead to the near-collapse of Powerscreen. Remember, Ann O'Brien and Dolores Mullen pocketed almost £4 million in cash from Marlborough before that share price went into free-fall.
