WPP Wins Cordiant – Minus Three Directors

24 July 2003

Win some, lose some, appeared to be the order of the day at Wednesday’s series of Cordiant Communications’ shareholder meetings.

As expected investors, including Cordiant’s largest shareholder Active Value Advisors, gave their consent to WPP Group’s bargain basement offer of £10 million ($16.01m; €14.07m).

But AVA flexed its 28.75% muscle at a later meeting by removing three executive directors – chairman Nigel Stapleton, ceo David Hearn and finance director Andrew Boland – from Cordiant's board. It also moved to block any bonus payments to the trio, branding these a “reward for failure”. A non-executive board member, Rolf Stomberg, will serve as acting chairman until the WPP deal is finalised.

AVA also told yesterday’s meeting it plans legal action in the UK and USA against the sacked trio and their predecessors (among whom former ceo Michael Bungey and ex-chairman Charlie Scott almost certainly figure) for the recovery of shareholder funds.

They were collectively responsible, charged AVA’s Brian Myerson, for massive destruction of value in Cordiant and agreeing to a takeover by WPP for just £10 million.

Meantime, from the exotic Madame Nahed Ojjeh, a deafening silence. Although she now holds a 10.95% stake in Cordiant, nothing emerged about the motives for her stake-building and when it came to voting on the WPP offer, her legal representative waved his voting card a too late to be counted.

According to The Times, he had been instructed to formally abstain.

Data sourced from: Multiple origins; additional content by WARC staff