Matthew FreudAnthony Jones at United Agents, who handles Richard Curtis and Mike Leigh, is understood to have already been approached by The Rights House, the new talent agency which has just taken over Peters Fraser Dunlop. Matthew Freud, chairman of Freud PR, is now presiding over PFD, already one of the biggest literary agencies in Britain, with talent agent Michael Foster, who represents Julie Christie, Sam Neill and some of the biggest names in UK TV. Foster and Freud are expected to spend heavily in recruiting senior literary and talent agents. “They’re going to throw money at this business. This is just the beginning,” one insider says.

Foster will be the majority shareholder with Freud, the founder investor in Foster’s MF Management, the largest non-executive shareholder. The deal means that not only does Freud own what is arguably the UK’s most powerful PR firm, but also its best-known literary agency. Freud is married to Elisabeth Murdoch, daughter of Rupert Murdoch and CEO of the UK’s biggest indie TV company Shine Group.

PFD will continue to function as a standalone operation but within the larger merged group. Foster and PFD chief executive Caroline Michel will be the senior partners. Broadcaster and former Sunday Times editor Andrew Neil, who headed the consortium which bought PFD for about £4m in 2008, will step down as chairman. Neil’s consortium is expected to retain a stake in the company, and he may take a seat on the new holding company’s board.

PFD has struggled to recover after key staff left in 2008 to form United Agents, after years of dispute with its former owners, US sports marketing giant CSS Stellar. United Agents took star clients including Ricky Gervais and Kate Winslet with them. The arguments, partly over who owned the literary back catalogue, pre-dated Michel’s arrival as CEO in 2007, but the situation went from bad to worse. There were allegations of breach of contract and unfair dismissal.

Since then PFD has struggled to attract new star clients, particularly in TV, where MF Management is strong. His star clients include TV presenters Chris Evans and Trinny & Susannah and actress Billie Piper.

Foster parted company with TV producer/distributor All3Media in 2008 — two years after selling his talent business to the indie. One fellow agent describes Foster as “pugnacious … he’s not a people person”. He’s also famously hard working, drilling his way through a long telephone call sheet over breakfast in London’s media hangout the Groucho Club.

Just to give you an idea how close-knit London’s media scene is, Anthony Jones’ client Richard Curtis is married to Matthew Freud’s sister Emma.

The question now is, who’s going to jump ship from PFD, and who is going to say yes to Foster?