Jeremy Sinclair: Out of the 'plotting shed', on to the stock market. M&C Saatchi's pitch to the City

A wry smile cracks across Jeremy Sinclair's face. The man pencilled in to be chairman of M&C Saatchi when the advertising agency floats late this year can hardly forget the roller-coaster ride of his last involvement in a public company, as deputy chairman of Saatchi & Saatchi. But then, one of the few men who revels in his resemblance to Lord Tebbit, is sure that the partners in M&C are making the right decision. "We've thought long and hard about this - nine and a half years to be exact."

A wry smile cracks across Jeremy Sinclair's face. The man pencilled in to be chairman of M&C Saatchi when the advertising agency floats late this year can hardly forget the roller-coaster ride of his last involvement in a public company, as deputy chairman of Saatchi & Saatchi. But then, one of the few men who revels in his resemblance to Lord Tebbit, is sure that the partners in M&C are making the right decision. "We've thought long and hard about this - nine and a half years to be exact."

You can't talk about the future float of M&C without looking to the past. The firm was founded by Maurice (now Lord) and Charles Saatchi in 1994 after the duo were forced out of Saatchi & Saatchi, the group they founded and built into the world's best-known marketing agency. Within days of their departure, the "three musketeers" - senior Saatchi executives Sinclair, Bill Muirhead and David Kershaw - quit as well. After six months' gardening leave, which they joke was spent in the "plotting shed", they re-emerged with a brand new agency, M&C.

The three all have long links with the Saatchi brothers. Both Kershaw and Muirhead have spent more than a quarter of a century with either old Saatchi or new Saatchi. Sinclair joined the predecessor to Saatchi & Saatchi in the late 1960s as a young copywriter and was soon put in charge of the agency's creative department, where he came up with some of the most iconic adverts in British history: the pregnant man; the scissors cutting silk for Silk Cut cigarettes; and the Blair "demon eyes" for the Conservatives. Most recently, he co-wrote Michael Howard's "I believe" advert when he became Conservative leader.

As the plotters emerged from their shed, a host of the most talented people from the old Saatchi and some of its best-known clients - British Airways, Dixons, the Daily Mirror - followed to M&C and a new force in British advertising was born. Nine and a half years later and M&C, which now ranks among the top five agencies in the UK, is preparing to float on the Alternative Investment Market, market forces willing. With its most recent report and accounts, for 2002, showing that it made £4.3m of profits on £63m of turnover, a price tag of £75m is being mentioned.

The stated reason for the float is to raise £10m-£15m, which can be used to help expansion in continental Europe. Sinclair admits that M&C has let two or three opportunities pass it by. But he also adds that there is a need to tie in some of the more junior staff with shares in the company.

The group the partners created is heavily UK biased - two thirds of its business is here - and weighted towards pure advertising, which is responsible for three-fifths of the turnover. Expansion has followed a well-worn path. The agency invests in a start-up in a related sector, be it design, public relations, media sales or artistic management. It takes a large stake, but not necessarily a controlling one. This means that people join who might not if they were mere employees - such as Christine Walker, the former boss of media buyer Zenith who formed Walker Media with M&C's help.

Despite all this investment, the original clients remain at the core of the company. Dixons is the largest source of UK income, while BA is the biggest client worldwide.

Currently, the five founders own 80 per cent of the company, with the remaining 20 per cent held by a small group of senior executives who joined in the first few months. Of the original five, only the enigmatic Charles Saatchi will not be on the board. Sinclair will be chairman; the Arsenal-obsessed client relations king David Kershaw will be chief executive; Lord Saatchi, who is also co-chairman of the Conservative Party, and Bill Muirhead, who spends a lot of time out of the country, will be executive directors. The only other executive director will be finance chief Gerry Wales, who has been with M&C for eight years. Non-executives will be recruited, but the founders will run the show.

"We will still end up owning a majority of the shares," says Sinclair. This might prevent interference from "rogue investors", a reference to David Herro, the Chicago-based fund manager who engineered the coup that ousted Lord Saatchi from Saatchi & Saatchi a decade ago.

What if Mr Herro were to buy into M&C. "It's a risk you have to take. You can't ban shareholders. But he may feel he's had enough of a bad experience with agencies."

One possible worry is the age of the founders. Though Kershaw has just turned 50, Sinclair, Muirhead and Lord Saatchi will all be 58 this year and might be thinking of retirement. "We have an advantage that since we've opened up, the layer below us has grown up with us," Sinclair points out.

This layer includes the well-respected Moray MacLennan, Nick Hurrell, Tom Dery and Tim Duffy. "They are watching for any signs of infirmity. Yes it will happen [that they take over] and the management are ready to do it."

However, the top quartet are not about to relinquish the reins of power immediately. A visit to M&C's headquarters in Soho's Golden Square, a short flounce from the original offices of Saatchi & Saatchi, shows their influence. The stark white offices were actually designed by Sinclair, and are a bit of a throwback to mid-1990s minimalism. The founders (bar Charles) all share one large open-plan room on the top floor, with their workstations betraying particular obsessions. For Kershaw it is football memorabilia, for Sinclair spiritualism. The four gossip, sip espresso and do a bit of business. "We are good mates."

The flotation will mean some changes. "Running a business as a public company sharpens your attention. It makes you more aware of your day-to-day responsibilities." But critics might say that the record at Saatchi & Saatchi - with attempted bids for high-street banks and massive spending on luxuries such as fresh flowers - does not augur well for good corporate governance. But Sinclair says: "We did have a good 17-year run at Saatchi & Saatchi. We grew to being the biggest agency in England and we didn't find it hard being public." Anyway, he adds, this is a different type of company to the old Saatchi. "It is not a vehicle for energetic expansion by acquisition."

It's an older, wiser coterie running M&C. And a quieter one. "For once we're not trying to hype the company. We're not a start-up."

No spin from the Saatchis? Surely some mistake.

BIOGRAPHY

Born: 1946

Education: Watford Art College

Career (1968-1970): Cramer Saatchi

1970-1994: Saatchi & Saatchi

1973: Head of creative department

1982: Chairman of Saatchi & Saatchi UK

1986: Deputy chairman of Saatchi & Saatchi plc

1994 to present: Partner, M&C Saatchi

Interests: Spiritualism, architecture, Conservative politics