Troubled Cordiant Communications has announced that it is on the verge of reaching a deal that will ensure its survival in the advertising marketplace.
In a statement yesterday, the global marketing group, which is more than £200 million in debt, said that talks with unnamed companies were progressing and details of a deal should be revealed soon.
“The board continues to advance its discussions with various parties and is seeking to bring them to a conclusion in the very near future in the best interests of the stakeholders of the group and its clients. The board expects to write to shareholders on this matter shortly,” it said.
The management at Cordiant have already indicated a desire to find an industry partner and WPP has emerged as favourite to gain control of the debt laden firm.
However, there is expected to be competition from Publicis, which is supported by US hedge fund Cerberus. According to a report in today’s Financial Times, they plan to put Cordiant into administration and buy up only selected parts of the business.
Another stumbling block is the intransigence of Cordiant’s largest shareholder, Active Value. The fund management group, which owns 14.1% of the company, wants to replace the current management and invest up to £40 million in the business rather than accede to any takeover.
Active Value has financial backing from WestLB Panmure and recently called for a shareholders meeting to vote on the proposals. This has not as yet been granted but the situation should become clearer by June 28 when Cordiant seeks stakeholder approval for the sale of its Australian and German businesses.
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