The media group WPP finally won control of Cordiant Communications yesterday after rebel shareholder Active Value supported the £266m takeover with its 29 per cent shareholding.
However, Active Value refused to give up completely and threatened legal action against Cordiant directors over the way the sale process had been handled. "The game is not over," warned Julian Treger, joint managing director of the Active Value fund. Brian Myerson, his fellow joint managing director, said his fund management group had been angered by what it perceives as an unfair sale process which it claims saw a cosy deal arranged by WPP, Cordiant and the company's financial advisers, UBS.
Mr Myerson claimed Active Value had been denied vital financial information on Cordiant which stymied their hopes of tabling a more attractive offer: "Active Value is well advanced in bringing legal action against certain ...parties to recover losses which shareholders have suffered."
The threat came at the end of a tense morning of four separate shareholder meetings which represented the conclusion of one of the most colourful takeover battles of recent times.
Nahed Ojjeh, the Syria-born chess enthusiast who had built up a 10.95 per cent stake in Cordiant, did not attend the meetings at the Institute of Directors in London's Pall Mall but sent a representative instead.
Nigel Hartridge, a lawyer with Paris-based Brandford-Griffith Baverez Pasturel, said he had only been hired by Mme Ojjeh last week. Her votes were also cast in favour of the WPP scheme of arrangement though Mr Hartridge claimed he had tried to abstain but failed to raise his proxy card in time.
He declined to comment on her motives in the takeover saga but said she had regarded the UK press coverage of her as "vulgar."
The scheme of arrangement to decide on the WPP takeover received the support of 99.17 per cent of the votes with only 0.83 per cent being registered against. The deal will see WPP pay £10.5m for Cordiant's equity and take on £256m of debt.
However, Active Value achieved a modest victory by successfully voting Cordiant's three executive directors off the board. This means that chairman Nigel Stapleton leaves with immediate effect and loses his entitlement to a £200,000 pay-off.
David Hearn, chief executive, and Andy Boland, finance director, are demoted from the board but remain in their executive posts and are still in line for large payouts after having their contracts controversially changed in June.
The shareholder meetings lasted almost four hours and, though largely polite, saw some moments when tempers became frayed. At one point Mr Treger tried to take to the podium to make a statement but was refused by Mr Stapleton. "I'd prefer it if you took the microphone," Mr Stapleton said. "Why?" Mr Treger retorted before acquiescing.
The payouts due to the Cordiant directors - £1.8m to Mr Hearn - triggered complaints over "rewards for failure." Mr Myerson called for all the directors to pay back their pay-offs and suggested UBS waive its fees.
One shareholder told the board: "One would think you were presiding over a successful company, the way you talk. It would be nice if you could be big enough to stand up and say, we made a mistake. We mucked up."
Mr Myerson accused Mr Boland of laughing when another shareholder said some private investors had lost their life savings.
Mr Boland said: "It's incredible that you should say that." "More than one person noticed," Mr Myerson replied, prompting Mr Boland to say: "It's clearly not the case."
Active Value is nursing a £30m loss on its Cordiant shares but it attempted to put a brave face on the losses yesterday. It said it had enjoyed many successful investments and released figures showing a track record of a 27 per cent internal rate of return on 27 fully realised investments made since 1989.
Me Ojjeh's foray into the UK takeover scene has cost her about £400,000.