Sharewatch: Cordiant Falls Ahead Of Take-Over
Troubled advertising group Cordiant Communications was seen under pressure once again yesterday, down 9.09%, as WPP increased its grip on the group after buying out its remaining creditor.
Profit takers also moved in on ITV merger partners, Carlton and Granada, which were seen down 3.635 and 3.30% respectively.
Media investors will today consider reports that a last minute compromise on cross-media ownership rules has made by the Government in an attempt to avert defeat for the Communications Bill in the House of Lords. Lord Puttnam’s plurality test, which is a compromise on the so-called ‘Murdoch clause’, will give UK media assets greater protection from foreign conglomerates (see Lords Flex Muscles In Communications Bill Debate).
Broader market sentiment was dented yesterday by disappointing economic news, in particular reports that the US manufacturing sector had shrunk for the fourth consecutive month. The news provided impetus for profit taking across the sector.
The media sector was also weakened by negative guidance in the telecoms sector, where Standard and Poors and CSFB have voiced concerns over increasing competition in the market, particularly in relation to the arrival of 3G technology.
The closing prices of media company shares on Tuesday were:
