WPP Group is nearing a deal to take over Cordiant Communications after Publicis Groupe refused to raise its offer.

WPP and Cordiant revealed Tuesday night they are now in “exclusive and advanced negotiations with a view to the acquisition by WPP of Cordiant by means of a recommended scheme of arrangement.”

Such a scheme requires 75% support of Cordiant shareholders but once approved cannot be resisted by minority investors.

WPP’s bid is believed to be around £256 million ($430m; €366m) to cover most of Cordiant’s debt plus £10m for shareholders. The scheme has the support of the majority of Cordiant’s secured lenders.

WPP pipped a rival bid from an alliance of Publicis Groupe and US hedge fund Cerberus Capital Management after the duo refused to better WPP’s offer. “I did not want to engage Publicis in a course of overbidding, and considered that our last offer was fair and reasonable,” said the French ad group’s chairman Maurice Levy.

A deal for Cordiant would mark a notable triumph for WPP boss Sir Martin Sorrell. After the weekend his group seemed to have been outmanoeuvred [WAMN: 16-Jun-03], but moved into pole position after Sorrell sweet-talked the stricken agency group’s banks and sidelined the influence wielded by Cerberus via its holding of Cordiant debt.

Sorrell revealed on Tuesday that “there are five good strategic reasons why this is a good deal for us.” He is especially interested in below-the-line agency 141 Worldwide, healthcare specialist Healthworld and Cordiant’s presence in Asia and Latin America.

As for flagship Bates Worldwide, reports suggest the network may be aligned with WPP’s J Walter Thompson in the US, Red Cell in Europe and Y&R Advertising in Asia. Meanwhile, Cordiant’s 25% stake in ZenithOptimedia Group is likely to be sold to Publicis, which owns the other 75%.

Data sourced from: multiple sources; additional content by WARC staff