Michael Bungey, the decelerating driving force behind Cordiant Communications, is expected to quit as chief executive this week, coincident with the announcement on Friday of the ad holding company’s half year results.
His departure will not be unexpected. Industry peers and analysts alike have voiced surprise at his survival thus far given the precipitous plunge in the group’s share price – almost halved in value over the past three months. Priced at over £4.00 ($6.19; €6.31) in early 2000, Cordiant’s stock stood at just £0.555 at close of business Friday.
Cordiant’s current woes are due in part to a rash of business losses at its Bates network in the USA, among them Hyundai Motor and burger chain Wendy’s International. Advertising Age magazine estimates that Bates has shed nearly half its stateside business in the year to date.
But most analysts’ accusing fingers point to Bungey’s buying spree during 2000 when the ad cycle was running with the bulls – although it is noteworthy that this shopaholic behaviour drew no criticism from the entrail-rakers at the time. Nonetheless, Cordiant’s profligacy resulted in a £225 million writedown earlier this year.
But not only the hindsight brigade has fingered Bungey. A cabal of major Cordiant investors including Julian Treger and Brian Myerson of Active Value Fund Managers and Chicago’s Saatchi-slayer David Herro, are seeking unspecified senior management changes within the ailing group [WAMN: 23-Aug-02].
Some analysts believe Bungey will varnish his departure as a planned succession rather than an ousting. “He’s trying to engineer a departure on his own terms to prevent his retreat turning into a rout,” opined one unnamed tipster.
Data sourced from: Times Online (UK); additional content by WARC staff