WPP Appears to Have Won Cordiant Battle
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WPP Appears to Have Won Cordiant Battle

Communications conglomerate WPP group last week emerged the victor in the competition for control of troubled British Cordiant, and quickly stated its intention to continue with the disposal of some of Cordiant’s assets.

Paul Holmes

LONDON—Communications conglomerate WPP group last week emerged the victor in its competition with French holding company Publicis for control of troubled British advertising group Cordiant, and quickly stated its intention to continue with the disposal of some of Cordiant’s assets, including investor relations and corporate communications powerhouse Financial Dynamics.

Publicis was the early favorite to take control of Cordiant, which has been laboring under more than £200m of debt and had been instructed by creditors to find a deal. Last week, the company said it did not have enough working capital to last the next 12 months, even if two recently announced asset sales—involving Financial Dynamics, German ad agency Scholz & Friends, and George Patterson Bates in Australia—were completed.

WPP said it would offer one new share for every 205 Cordiant shares, valuing the share capital of the firm at just £10m in total. The rest of the purchase price will go on buying up Cordiant’s debt. Three years ago Cordiant was valued at £1.3 billion.

“The acquisition of Cordiant will make an important contribution to our long-term strategic goals—particularly in marketing services and expansion in Asia,” says WPP chief executive Sir Martin Sorrell. “Given that our approach has been widely welcomed by Cordiant’s clients, we also believe that a merger with WPP promises both stability and opportunity to Cordiant’s clients and people.”

When the Financial Dynamics buyout is complete, about 40 senior staff of the agency—including several at U.S. subsidiary FD Morgen-Walke—will own approximately 50 percent. Management will then seek to expand its operations, possibly through acquisitions in the U.S.

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