Close-Up: Live Issue - M&C puts steady growth before world domination.

As M&C Saatchi prepares to float on AIM, are other shops set to follow?

Whatever strategic justifications may be offered in support of M&C Saatchi's new embrace with the stock market as it contemplates an AIM quotation, the over-riding motivation is almost certain to be a very simple one: dollops of dosh. Not so much for M&C Saatchi, but for its owners who must be getting eager to realise at least some of the value of their business as several of them head towards retirement age.

So is the proposed M&C flotation (nowadays more commonly called an IPO or 'initial public offering') anything more than a pathway to pecuniary paradise for its owners? If so, what are the potential advantages and disadvantages? And why have they not pursued the more common route of an outright sale?

One of the founding partners, David Kershaw, is adamant that a lot of thought went into the various options and that flotation offered the best way to preserve all that is best about the agency. The company is expected to raise about pounds 10 million of new money for its expansion plans while offering a better chance to preserve its founding principles and culture than would be possible as a subsidiary of another group.

Doubtless sensitive to how the City may view a management team that over-reached itself in its previous guise, M&C says it will resist the temptation to become a global gobbler - acquiring everything in sight - and hopes to persuade the investment community that organic growth is the better policy, even if the pace of growth proves slower. But temptation and investor pressure will be ever-present. And, on the stock market, the seductive aroma of a potential financial gain tends to overpower the stench of a nasty memory.

M&C is keeping quiet about the proportion of existing shares that the partners will be selling. But if no more than 30 per cent of the enlarged share capital is made available to the public and the partners achieve the company valuation they hope for, current shareholders - including those who hold shares in operating subsidiaries - may be able to realise up to about pounds 25 million between them.

Sponsors of the flotation never allow the key shareholders to realise all of their shareholdings at the outset even if they want to, but the outcome differs little from an outright sale where earn-out arrangements normally spread the proceeds over three to five years.