Cordiant Board Meets Today to Mull Publicis, WPP Offers

02 June 2003

The board of stricken agency holding company Cordiant Communications meets today, Monday, to mull the handful of serious offers on its table.

A done deal this week is not unlikely, the smart money split between Publicis Groupe and WPP Group – both of which have been granted full access to Cordiant’s accounts. A third credible contender is the aptly named US venture capitalist Cerberus Capital Management, holder of a significant sum in Cordiant loan notes and currently angling for a debt-for-equity swap.

Following today’s meeting of the Cordiant board, the group’s lenders will convene Tuesday .

Meantime, say insiders, Publicis leads the field with a intricate plan that would seek creditors’ approval for Cordiant to be placed in administration while its operating companies are integrated into Publicis’ structure. The creditors would then settle for a percentage of what they are owed – while shareholders would be left with outstretched hands.

Such a scheme might pacify creditors but would almost certainly be opposed by shareholders – not least Cordiant’s powerful and troublesome troika – Julian Treger and Brian Myerson (of Active Value Fund Managers) and Maurice Saatchi’s nemesis, Chicago fund manager David Herro.

The scheme might also be unacceptable on conflict grounds to some key clients of both agency groups, most of which could activate get-out clauses in their contracts if unhappy with any acquisition deal.

Meantime, adopting an uncharacteristically low profile is WPP’s Sir Martin Sorrell, as conscious of his accounting roots as he is his advertising blossoms. He and his beancounters are also in the throes of due diligence and said to be considering an arrangement in which WPP might assume a proportion of Cordiant’s debt.

Despite the burning of much midnight oil over the weekend, no-one from any of the three protagonists was available for comment.

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