Active Value Takes 25% Of Cordiant Shares
The saga of troubled advertising group, Cordiant Communications, has taken another turn today, as majority shareholder, Active Value, succeeded in gaining control of more than one quarter of the group’s shares.
Active Value has being fighting to prevent Cordiant being bought by another company and has proposed to replace its management and inject a further £40 million into the debt-saddled group. It had been backed by investment bank, WestLB, but the group withdrew its support this week believing that the WPP takeover is practically a done-deal.
Cordiant’s board favours and has recommended the deal with WPP, but in order to sign it off, the proposal must be agreed by at least 75% of Cordiant’s shareholders. Today’s equity purchase by Active Value therefore effectively gives it blocking power at the shareholder meeting to be held next month.
Under the current plans, WPP will assume £256 million of Cordiant’s debt, leaving just £10 million for the shareholders (see WPP Seals £266m Cordiant Takeover). WPP’s offer values Cordiant shares at 2.4p.
