WPP Sells Zenith Stake To Publicis

Publicis has acquired WPP’s 25% stake in ZenithOptimedia for $75 million, thus securing full control of the media buying agency.

A deal had long been on the cards as Cordiant Communications, which is now owned by WPP, had a put option to sell its holding to Publicis in January 2004 (see City News). This was brought forward when it became clear that Cordiant would be broken up to address spiralling debts.

At one stage, Publicis planned to acquire Cordiant and put the company into administration, keeping only choice parts of the business. However, it was ultimately outflanked by WPP which made a debt-inclusive £266 million bid for the troubled advertising group.

At that stage, a shareholder takeover would have enabled Publicis to acquire Cordiant’s stake in ZenithOptimedia for a fraction of the amount agreed. However, the French advertising group refused to participate in any scheme that would have resulted in a change of control at Cordiant.

WPP confirmed today that Publicis had abided by its contractual obligation and paid £75 million for 25% stake in Zenith. Disposals by Cordiant in the last two months now total £160m, compared with a pre-disposal net debt level of £235m.

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