Cordiant: Gunfight At the Ojjeh Corral

23 July 2003

The faded Edwardian grandeur of London’s Institute of Directors, rather than the dusty wastes of Tombstone, Arizona, is the setting for this morning’s (Wednesday) long-awaited shootout for the ownership of Cordiant Communications.

Eyeballing the opposition are Doc (Sir Martin Sorrell) Holliday and the Earp brothers (Cordiant chairman Nigel Stapleton and ceo David Hearn); on the other side of the Ojjeh Corral are the Clantons, better known as Julian Treger and Bryan Myerson of Active Value Advisors.

And billionairess merry widow Madame Nahed Ojjeh? On whose side is her hired gun? All should be revealed today.

The day could see four extraordinary general meetings of Cordiant shareholders. In the first they will consider in principle WPP’s £10 million ($16.01m; €14.07m) offer – approval of which requires 75% of the vote.

Depending on the outcome, a second meeting will be held at which Treger and Myerson (who control 28.75% of Cordiant) could torpedo WPP’s bid, either by voting against or simply abstaining.

Failure to carry the vote in favour of the WPP offer would trigger a third meeting to approve Sorrell’s threat to put Cordiant into administration – a situation from which nobody would gain, least of all WPP as administration costs will far outweigh those of acquiring the ailing ad group.

Assuming the WPP deal goes through, this will activate a fourth meeting at which AVA’s proposal to restructure Cordiant will be considered. This would replace three executive board members, support a recapitalisation and block possible low-priced bids from third parties (such as Publicis). It is at this point that Ojjeh may declare her hand.

AVA has remained silent as to its intentions at today’s shootout – except to say it has been “exploring its options with lawyers and financial advisers”. According to the Financial Times, these options are likely to be unveiled at the fourth meeting.

Data sourced from: Financial Times; additional content by WARC staff