WPP group confirms being in the fray for acquiring Cordiant

LONDON: The WPP group, Britain's largest advertising company and one of the largest advertising networks in the world, confirmed on Monday, 2 June 2003, that it is considering the purchase of the Cordiant the second-largest UK ad firm. The WPP group has joined a group of potential bidder. The UK-based Cordiant Communications is a major stakeholder in prominent ad and media agencies such as Bates and Zenith Media - which have Indian offshoots too.

In early May, an adage report stated that the communications group, which announced its preliminary results, has been given until July 15 to complete the sales of three major marketing agency holdings: PR agency Financial Dynamics; ad agency Scholz and Friends; and Australian ad agency George Patterson Bates. The fourth [the sale of its stake in Zenith Optimedia] sale is planned for January. Experts state that the four sales are expected to fetch Cordiant around $220 million -- almost enough to pay off its debts -- provided there are no more major client losses before the deals are completed.

A Guardian report stated that a consortium of banks led by HSBC agreed to ignore a breach to loan agreements and continue to guarantee borrowings of about ?250m until July 15 following the group's damaging loss of big client Allied Domecq, the drinks group.

"With regards to Cordiant, we can only confirm that we are continuing to undertake due diligence," a WPP spokesman was quoted as saying in a Reuters report.

Reports have also linked US hedge fund Cerebrus Capital Management with a possible takeover of Cordiant.

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