The future of Cordiant Communications will be decided on Wednesday July 23 when two shareholder meetings in quick succession will be held to consider rival proposals from WPP Group and Active Value Fund Management.
Cordiant chairman Nigel Stapleton named the day at Saturday’s extraordinary general meeting called to approve the disposal of the group’s Australian and German assets – respectively a 70% stake in Australia’s The Communications Group (including George Patterson Bates) and a 77.3% stake in German agency Scholz & Friends.
The disposals were approved by six of the seven shareholders present – one, George Brzezinski , a private investor, dissenting on grounds that “it is a shame to break up the business”.
The first bout on Judgement Day will see WPP’s proposal put first to the vote. The court-administered option requires 75% approval by shareholders, which means that Active Value is in a position to torpedo the recommendation if it chooses.
This, said Stapleton, would be “very damaging” to Cordiant (the understatement of the year given WPP’s intention to put the agency group into administration if its bid is foiled). The WPP plan is backed by Cordiant clients such as British American Tobacco and Pfizer, while staff are “generally supportive of the proposed new owner”.
If the WPP motion is defeated – a not unlikely outcome – a second meeting will follow immediately to consider resolutions put forward by Active Value. In essence, these aim to axe Cordiant’s top three executives and install AV's own management team with a mystery figure in the ceo’s driving seat.
According to AVFM, [WAMN: 27-Jun-03], the masked man is a “senior executive in one of the world's biggest advertising and communications groups, with experience in the restructuring and turnaround of international advertising networks.” His name has not been disclosed to Cordiant’s board and Active Value remains zip-lipped.
Unsurprisingly, Cordiant has recommended the plan’s rejection.
Data sourced from: Financial Times and Telegraph.co.uk; additional content by WARC staff