Disposal

31st May 2012



Chime Communications PLC

("Chime", the "Company" or the "Group")

Disposal

Chime Communications PLC, a leading marketing services group, announces the terms of its planned disposal of parts of the Public Relations Division ("the Disposal").

As previously announced, Chime is pursuing a transition strategy from being a diversified group with an emphasis on public relations to being a communications and sports marketing business.

In support of this strategy, the Group has now reached agreement for the disposal to BPP Communications Limited ('BPP Communications' - a company formed for the purpose by certain directors and senior managers of Chime) of the Bell Pottinger businesses. The main trading businesses that BPP Communications will be acquiring from Chime are: Bell Pottinger Public Relations, Pelham Bell Pottinger (60%), Bell Pottinger Public Affairs, Bell Pottinger Sans Frontières and Bell Pottinger Middle East. In addition, BPP Communications will acquire the 40% stake in Pelham Bell Pottinger held by senior management.

It has been agreed that BPP Communications will acquire these non-core businesses for total consideration of £19.6 million. This is made up as follows:

·; £13.9 million in cash payable on completion;

·; £1 million in cash payable on agreement of the completion balance sheet;

·; The issue of 4.1 million ordinary and 4.1 million preference shares with nominal value of £4.1million and representing 25% of the equity capital of BPP Communications ; and

·; The assumption by BPP Communications of certain deferred obligations amounting to £0.6 million.

Chime has agreed with BPP Communications certain liquidity rights in relation to its equity holding in BPP Communications but at present has no intention of seeking to sell its holding. Chime has the right to appoint a Director to the Board of BPP Communications and this will initially be Mark Smith.

In the year to 31st December 2011, adjusting for minority interests, the Bell Pottinger businesses contributed operating income of £29 million and profit before interest and tax (adjusting for minority interests and after taking full account of the costs of those persons transferring to the Bell Pottinger businesses as part of this transaction) of £2.4 million. This represents 8% of the Group's headline profit before interest and tax. As at 31st December 2011 the gross assets of the Bell Pottinger businesses were £25.5 million including goodwill.

The total consideration of £19.6 million represents a multiple of eight times the 2011 profit before interest and tax of the Bell Pottinger businesses (as adjusted) which the Directors of Chime believe is an attractive multiple relative to trading and transaction comparables.

The Directors of BPP Communications will include Lord Bell and Piers Pottinger and on completion of the Disposal, they will both resign from the Board of Chime and a new non-Executive Chairman will be appointed in due course.

Since this is a related party transaction (note 1) it requires the approval of shareholders. A circular will shortly be sent to shareholders and it is expected that a General Meeting for shareholders will be held to approve the transaction at 12 noon on 18th June 2012 at 14 Curzon Street, London W1J 5HN.

The Disposal will enable the Group to exit from non-core business and have a more balanced portfolio of Communications and Sports Marketing. It will also enable the investment of proceeds in its faster growing businesses in particular: Sports Marketing, Digital Communications and Healthcare Communications.

The Sports Marketing division, already in the top five sports marketing groups in the world, has achieved 50% annual income growth in the year to date and has several further growth drivers including: new geographies, new sports and new sectors.

The Advertising and Marketing Services division has grown annual income by 10% in the year to date and is set to benefit further from digital and emerging market new business opportunities.

The Group will seek to grow the refocused Public Relations division organically and by investment. This will incorporate investment in key teams and an expanded range of services.

The Insight and Engagement (Research) Division is currently benefiting from a recovery in trading and 2012 has already seen the first contribution from its newly established digital business, Watermelon.

Christopher Satterthwaite, Chief Executive Officer of Chime Communications PLC, said:

"The disposal is a natural evolution given the planned repositioning of the Group and is a key part of our future growth plan. When completed, the Group's growth prospects will be strong with a good acquisition pipeline, including international opportunities, already identified and funds available to make these acquisitions."

- ends -

Enquiries

Lord Bell, Chairman

Christopher Satterthwaite, Chief Executive

Chime Communications 020 7861 8515

James Henderson / Victoria Geoghegan 020 7861 3232

Pelham Bell Pottinger

(note 1) The owners of BPP Communications will be Lord Bell, David Beck, Jeremy Deedes, James Henderson, John Leece, Tom Mollo, David Wilson and certain other executives involved in the management of the Bell Pottinger businesses.

Notes to Editors

Chime is an international communications and sports marketing group. Following this disposal the Group will consist of four divisions: Sports Marketing (CSM Sports and Entertainment); Advertising (VCCP and Teamspirit); Public Relations (The Good Relations Group and Open Health) and Research (CIE Insight and Engagement).

For more information please go to www.chime.plc.uk