LONDON — Maurice Saatchi, who with his brother built one of the largest advertising agencies in the world, on Tuesday walked out of his company vehemently protesting the new management.
Saatchi was deposed as chairman of the British advertising empire last month. He was offered an executive position with a subsidiary and was given until Tuesday to accept it. He turned it down.
Saatchi & Saatchi, established in 1970, was the hottest ad agency of the booming 1980s, serving an international clientele. The company also owns the ad agency network Bates Worldwide in New York and El Segundo-based Team One.
The London-based firm, credited with helping British Prime Minister Margaret Thatcher win her elections, was founded by the sons of Iraqi immigrants. Charles Saatchi, 51, was seen as the reclusive creative force; the outgoing Maurice, 48, ran the administrative side of the business and its expansion efforts.
Saatchi & Saatchi ran into trouble in the late 1980s when it went on a buying spree. It paid top dollar for consulting companies and other businesses unrelated to advertising, and when the recession set in the company was left with a massive debt that was later reduced in a restructuring.
A minority stockholder group led by U.S. fund manager David Herro took control. Herro heads Chicago-based Harris Associates. He and his allies forced Charles Saatchi off the board, then objected to a share-option deal proposed for Maurice Saatchi that could have been worth an estimated $7.5 million.
Saatchi & Saatchi Chief Executive Charles Scott said Tuesday that it was with regret that he received the news that Maurice Saatchi was leaving the company.
There was speculation Tuesday that the Saatchis might establish a new agency. Speculation also spread that major Saatchi & Saatchi clients--such as U.S. candy maker Mars and British Airways--might defect to such an agency. Those companies said Tuesday that they would review their contracts with Saatchi & Saatchi.
The new board, having forced out the Saatchis, reportedly intends to change the agency's name.
In a letter to the staff Tuesday, Maurice Saatchi attacked the new regime: "Saatchi & Saatchi has been taken over. No bid for the company has been announced. No offer has been made. . . . No shareholder vote has been taken. But make no mistake, Saatchi & Saatchi is under new control. . . .
"By threatening the directors with an extraordinary general meeting . . . they have given the directors their orders: 'Take our chairman into a corner and shoot him quickly--we don't want the fuss of a public trial.' "
Associated Press contributed to this report.