Cordiant will Take £200m Write-Down on Acquisitions
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Cordiant will Take £200m Write-Down on Acquisitions

Cordiant Communications, reeling from the departure of its two top PR executives and amid speculation that CEO Michael Bungey may be forced to resign, will plunge into the red when it reports its annual results next month.

Paul Holmes

LONDON, February 11—Cordiant Communications, reeling from the departure of its two top public relations executives and amid speculation that chief executive Michael Bungey may be forced to resign, will plunge into the red when it reports its annual results next month as a result of an anticipated £200 million write-down on the value of recent acquisitions.
 
Most of the non-cash charge will reflect a reassessment of the value of Lighthouse, the parent company of British investor relations firm Financial Dynamics and New York-based Morgen-Walke Associates. Cordiant acquired Lighthouse in September 2000—at the height of the advertising boom—for £315m plus the assumption of £65.6m of debt.
 
Cordiant’s share price has plunged from a peak of 406p in 2000 to 79p last week, and there has been speculation that it might be acquired by a rival, with Havas and Publicis the likely candidates.
 
Bungey told British newspapers he had no regrets about the Lighthouse acquisition. It was a “great opportunity to accelerate the change in our business mix” from advertising to marketing services, in line with the group’s strategy,” he said.  “Everything done in 2000 now looks expensive. But will it look expensive in two years’ time? Maybe not.”
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