WPP emerges as the front-runner in Cordiant acquisition

NEW YORK: The world's third largest agency WPP, owned by Sir Martin Sorell, has emerged as the front runner to buy Cordiant. Cordiant is ?250m in debt but a number of disposals, including the sale of PR firm Financial Dynamics, are on the cards. Media reports indicate that rival French bidder Publicis appears to be going slow on the idea of a bid.

A report in the UK's Guardian says that WPP is expected to offer Cordiant shareholders close to 3p per share, compared with the 7p at which the stock ended last week. But the report added that it was unclear last night how much Cordiant's banks would be expected to lose on the deal.

Reports indicate that WPP is ready to take on ?90m of Cordiant's debt leaving ?160m to be found through disposals or written off by its banks. Including the ?10m paid to shareholders the deal would be worth ?100m. However, WPP insiders dismissed these reports as "pure speculation".

Reports also indicate that Publicis may approach WPP after a deal is struck to see whether it can buy out media buyer Zenith Optimedia, which it co-owns with Cordiant.

The WPP bid is likely to scupper plans for a rescue of Cordiant being put together by German bank WestLB with the support of UK Active Value, the predator fund run by Julian Treger and Brian Myerson. Active Value holds just over 14 per cent of Cordiant and will see the vast majority of its investment wiped out if WPP gains board approval for its offer.

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