WPP is now in exclusive and advanced negotiations to buy ailing advertising group, Cordiant Communications, the two companies announced last night.
The news follows speculation that WPP was being outflanked by Maurice Levy’s Publicis Group. The French advertising giant recently struck a deal with Cerberus Capital Management, the US fund that already holds a significant amount of Cordiant’s debt.
Publicis had offered to take up 93% of the debt, whereas WPP was originally proposing to absorb only 91%. Nevertheless, WPP now looks to be in pole position to buy Cordiant.
There is likely to be some opposition to the deal from Cordiant’s largest shareholder, Active Value. It has been seeking a scheme through which Cordiant could remain independent, rather than be bought by another group. Active Value also yesterday ruled out any joint deal with WPP to take control of the group.
Cordiant and WPP said that they expect to make a further announcement in the near future.
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