Cello bosses tune in for windfalls

TWO directors of Cello Group will each see their £100,000 investments increase almost eightfold to more than £750,000 when it floats next month.

Cello is a holding company set up to buy three marketing services businesses.

The large payouts, spelled out in the group's research documents, have alarmed potential investors.

Chairman Kevin Steeds, a former finance director at Incepta Group, and chief executive Mark Scott - a former associate of Sir Martin Sorrell, boss of marketing services firm WPP - will be granted £500,000 of shares on flotation.

They will purchase a further £50,000 stake at the float price. Scott will also initially act as finance director.

They will each also receive a further £250,000 in shares, equating to a fivefold increase on their initial £50,000 stakes.

The multiple of five reflects 'the high level of risk associated with this financing', according to Cello's documents.

Cello is acquiring healthcare market research firm Insight, brand advertising business Leith, and Target, a specialist in direct marketing for charities.

It is expected to be valued at about £23m when it is floated on the Alternative Investment Market.

The flotation is being handled by Durlacher, the mini investment bank that recently fired chief executive Christopher Stainforth in a dispute over bonuses.