Tory advertising agency M&C Saatchi is reportedly in talks with external advisers about a potential strategic overhaul, prompting speculation the company may be looking for a buyer.
The ad agency – notorious for its involvement with Conservative party election campaigns – has lost more than half of its stock market value since the discovery of accounting errors in August.
The agency announced it had added a one-off charge of £6.4m to its accounts in August to correct a “misapplication of accounting policies”.
M&C Saatchi is now informally speaking to M+A advisers Clarity in an attempt to overhaul the company, according to The Sunday Telegraph.
The talks have caused speculation that the company may be forced to look for a buyer.
August’s accounting admission caused stocks in M&C Saatchi to fall from a peak of 339p in August to its current 169p level.
The company also reported in August that it owes £22m over the next year, which equates to £14m of the company’s value.
Directors tried to purchase shares in the company to instil confidence, however this was to no avail.
The stock slump is exacerbated by the fact that the firm is made up of a number of smaller agencies, which are paid for with its own shares.
Last week it appointed Big Four accounting firm PwC to act as its auditor, after KPMG resigned when the accounting irregularities were revealed.
A report is expected from PwC this month.