Besieged agency network Cordiant Communications watched its shares fall by around 20% Thursday on news that its largest UK client – home improvements giant B&Q – was talking with other shops about its £33 million ($54.56m; €45.91m) creative account.
The dive in stock value reflected the domino effect of Cordiant’s travails rather than the B&Q situation – the latter making it clear it is happy with the work done by Cordiant unit Bates Worldwide and that talks with other agencies had been on a contingency basis only.
Another element in the continuing decline of Cordiant stock is the revelation by new chief executive David Hearn that none of the array of acquisition deals on its table were “likely to result in an offer at or near the current share price” – although this statement preceded the latest plummet which will have narrowed (perhaps eliminated) the gap.
Meantime, a glimmer of good news for the former highflying agency holding company: it finally secured the £24.6 million disposal of its 70% stake in Australia’s The Communications Group including George Patterson Bates. This will generate at least £16.5m in cash.
Other businesses in various stages of disposal are PR group Financial Dynamics and German advertising group Scholz & Friends. Meantime, Cordiant must meet a refinancing deadline of July 15 for its debt Everest of £150 million.
Data sourced from: Times Online (UK); additional content by WARC staff