WPP May Make Cordiant Bid
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WPP May Make Cordiant Bid

Communications holding company WPP Group, parent of PR firms including Burson-Marsteller, Hill & Knowlton, and Ogilvy—has confirmed it is considering making a bid for Cordiant.

Paul Holmes

LONDON—Communications holding company WPP Group, parent of PR firms including Burson-Marsteller, Hill & Knowlton, and Ogilvy—has confirmed it is considering making a bid for Cordiant, the British marketing communications company that recently sold investor relations powerhouse Financial Dynamics to its management.

Cordiant, which has debts of more than £200m, has about six weeks to put together a rescue plan. French advertising group Publicis had been considered the most likely buyer for the company until WPP signaled its interest. According to a spokesman for WPP, “Due diligence is ongoing. No decision has been taken by WPP as to whether they are going to table a bid or not.”

Cordiant management has a strong incentive to make a deal, according to Active Value, which has a 14.1 percent stake in the troubled company and is opposing a deal. Active Value says recent changes in the bonuses payable to chief executive David Hearn and finance director Andy Boland could give them £1.5m and £580,000 respectively, in the event of a sale.

According to Julian Treger of Active Value, “In circumstances where shareholders have lost hundreds of millions of pounds in value, we think these provisions are unacceptable. We believe the company and the executives should withdraw them or make them subject to shareholder approval.”

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