WPP Closes In On Cordiant, Shares Delisted

Shares in Cordiant Communications were delisted today as WPP moved closer to completing the takeover of the struggling advertising group.

In an anticipated move, the London Stock Exchange said this morning that securities in Cordiant had been cancelled from their official listing. There can be no more trading in the company’s stock.

There is now a general feeling that WPP’s debt-inclusive £266 million offer for Cordiant will be allowed to progress. This follows the failed attempt by Active Value, Cordiant’s leading shareholder, to build a body of support for its own rescue plan.

Active Value had been attempting to court support from Publicis, which is keen to add Cordiant’s 25% share in ZenithOptimedia to its portfolio. However, the French advertising giant rejected the proposals put to it because it did not want any involvement in plans to enforce a change of control at Cordiant.

Such a development would have enabled Publicis to acquire the Zenith stake for a cut-price fee of around £3-4 million but the opportunity appears to have passed.

On the final day of trading, Cordiant shares fell by almost a third to 2.4p, below the 2.56p value of WPP’s all-share offer. The deal will be put to shareholders on July 23 with 75% backing required for it to go through.

Active Value, with its 28.75% stake, can still veto the takeover, and plans to unveil an alternative strategy next week. It favours reinvestment and the replacement of the Cordiant board but WPP has threatened to put the company into administration if its own offer is blocked.

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