Shares in Cordiant Communications plunged on the New York Stock Exchange on Monday following Friday’s news that its Bates Worldwide unit in the US had lost the $200m (€20.49m; £13.11m) Wendys International burger chain business.
According to an estimate by Advertising Age magazine, Bates has lost nearly half its US business so far this year. In trading on the NYSE, Cordiant stock fell 10.6% to $3.90 – seen by some observers as a loss of confidence rather than concern about the vanished billings which represent less than 2% of group revenues.
• Meantime, back at Cordiant’s London headquarters, confidence is not greatly in evidence. Following vocal dissatisfaction voiced by its second largest shareholder Active Value Fund Managers, the investment vehicle of corporate raiders Julian Treger and Brian Myerson, Cordiant directors have agreed to meet the duo today (Tuesday).
They are expected to demand management changes. Active Value last week upped its stake in the group to 9.06% [WAMN: 16-Aug-02] and requires less than another one per cent to call an extraordinary general meeting of shareholders.
Data sourced from: AdAge.com and Financial Times; additional content by WARC staff