Cordiant, the troubled international advertising group, is coming under increasing pressure to sell off assets in a bid to shore up the share price and reduce debts in excess of £200 million.
Reports in the weekend press intimated that the new chief executive David Hearn is planning to strip down the company to include only Bates Worldwide. However, this move requires careful consideration as the sale of non-core businesses could make Cordiant vulnerable to takeover by larger media groups such as Havas, Publicis and WPP.
This is a far cry from Cordiant’s heyday in the 1990s when it feasted on the fruits of the advertising boom and made a series of costly acquisitions. The subsequent recession has hit the company more than most and Hearn succeeded Michael Bungey in December with consolidation at the forefront of his agenda.
Plans have already been announced to sell the Australian agency George Patterson Bates and other businesses such as Scholz & Friends, the German advertising network and Financial Dynamics, a London PR agency could be available.
It is believed that Cordiant has also held talks about the sale of its 25% stake in Zenith Optimedia, the media services agency. The company has a put option to sell the holding to Publicis, which owns the remaining 75%, but the exercise date is not until the end of December.
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