Cordiant: The Kraken Wakes

23 August 2002

Reminiscent of the Norwegian folk-myth of the Kraken – a gigantic sea monster that emerges from the deep seeking vengeance for the disturbance of its slumbers – international fund manager David Herro has awoken from dreams of bank vaults to heap retribution upon Cordiant Communications.

The last time Herro’s sweet dreams were disturbed was in 1994 when he surfaced from the deeps of Chicago to become the nemesis of Maurice Saatchi.

Almost eight years on, as Cordiant’s largest shareholder, Herro has reportedly joined forces with Active Value Fund Managers, the UK investment group headed by Julian Treger and Brian Myerson, to demand changes in the way the tottering agency giant runs its affairs.

The trio are said to have swapped thoughts over a pie and a pint, among them the ousting of Cordiant’s chairman Charles Scott. Expulsion from high places is an art in which Herro is a Phi Beta Kappa, having personally engineered the removal of Maurice Saatchi from the board of Saatchi & Saatchi back in December 1994

The parallels are interesting. In 1994 Saatchi & Saatchi, whose strategic direction was driven more by hubris than the interests of shareholders, watched its shares plummet from a high of $12 [at 1994 exchange rates] to just $2 – a value loss of 83%.

And although the ego factor is less in evidence at Cordiant, its shares are in a similarly parlous state, languishing at around $0.76 from their high in 2000 of $5.80 [based on today’s exchange rates] – down 86.9% in value.

Herro’s company, Harris Associates, holds a 9.29% stake in Cordiant. Active Value has 9.06%. The trio call virtually all the shots and their target will almost certainly be identical – the sale of Cordiant to Havas or other global agency network,

[Who mentioned Dentsu?]

Data sourced from: BrandRepublic (UK); additional content by WARC staff