Tree to be uprooted in proposed £2m sale to Chime

In a statement this morning, Cagney said it had agreed heads of terms with Chime to make the sale, with a definitive agreement expected to follow next month.

Chime already owns Opinion Leader, fieldwork firm Facts International, ethnographic agency Naked Eye and luxury goods research Ledbury. Chairman Lord Bell described the proposed acquisition as an “attractive” transaction.

The sale of Tree will see Steve Mattey (pictured) depart Cagney as CEO as he intends to remain with the business, which he co-founded with Matthew Bayfield in 2001.

Mattey and Bayfield sold Tree to Cagney in a £1m cash-and-shares deal in 2007 and Mattey was made Cagney chief in 2008.

Cagney has had a difficult time of late. Takeover talks with an unnamed suitor at the start of the year went nowhere and it withdrew its listing on the Alternative Investment Market in August citing “challenging” stock market conditions, difficulties in financing acquisition opportunities, listing costs and limited share liquidity.

The stated aim of the delisting was to free up cash to invest in “technology-driven developments centred on [Cagney’s] market research and data analysis capabilities”. But since then the company has completed a review which proposes an alternative strategy for Cagney.

Executive director Kerry Simpson said: “The board concluded from a recent strategic review that the interests of its shareholders would best be served by selling CST Advertising and Tree and paying down its debts, enabling it to build upon its digital capabilities within its integrated communications and PR businesses.”

CST is being bought by Media Square for £430,000 in cash. Cagney says it will name a new CEO following Tree’s sale.