Investment Bank Hypes Break-Up of Cordiant

20 February 2003

Numis Securities, a small London-based investment bank and stockbroker, is hyping the breakup of beleaguered agency holding company Cordiant Communications.

In a note to investors, the bank has done its sums and reached much the same conclusion as that of WAMN on Wednesday, when we predicted: “Cordiant will retain the Bates [Worldwide] network in the short term while disposing of most other assets to raise cash and quieten its creditors. It will then buttress the Bates balance sheet every which way it can before selling to one or another of its global rivals.

Numis believes Cordiant could raise up to £150 million ($238.98m; €223.03m) by selling its less strategically important assets, thereby reducing net average debt from £220m to around £70m.

Among the desirable disposals it cites Cordiant’s stakes in Hamburg-headquartered advertising network Scholz & Friends (which Numis believes would realise £15m), PR shop Financial Dynamics (£20m), Australian advertising group George Patterson Bates (£40m) and the 25% holding in ZenithOptimedia (£75m), for which co-owner Publicis has right of first refusal.

Numis then ran its experienced butcher’s eye over Cordiant’s remaining assets, attaching target valuations to each: Korean advertising company Diamond Ad (£16m), below-the-line specialist 141 Worldwide(£96m), branding/design group Fitch (£34m), medical agency network Healthworld (£48m) – and the jewel in Cordiant’s crown, Bates Worldwide (£115m).

In other words (as Cordiant’s professional investors like Chicago-basedDavid Herro and UK punting duo Julian Treger and Brian Myerson are only too well aware): the company is worth a darn sight more dead than alive.

Cordiant declined to comment on the entrail-raker’s observations.

Data sourced from:; additional content by WARC staff