The biggest shareholder in Cordiant Communications waded into the takeover battle for the troubled advertising group yesterday by proposing a boardroom coup and promising to back a cash injection of up to £40m.
The eleventh-hour intervention by Active Value comes as Cordiant's rivals WPP and Publicis weigh up whether to press ahead with takeover bids that could leave shareholders nursing heavy losses in their original investments. The move could derail Cordiant's plans to sell off its assets and slash its £200m-plus debt pile before a July deadline for a refinancing.
The proactive investors, who have a 14.1 per cent stake in Cordiant, will today ask the company to call an extraordinary meeting to replace its management team with one headed by Richard Wheatly, the former head of Jazz FM, a commercial radio station.
"If sold at or around the current share price, this business will realise almost nothing for ordinary shareholders," Brian Myerson, a director of Active Value, warned. Last week, Cordiant said none of the proposals it was considering was likely to result in an offer at or near the current price. Shares in the group were flat at 6p yesterday.
Mr Myerson said Active Value, which is backing a rescue plan proposed by Mr Wheatly and the German bank WestLB, would contribute £15m towards the £30m to £40m cash call target. "It's in our interest to change the board and try to rescue it from the predicament it finds itself in," Mr Myerson added.
Cordiant has been tipped as a takeover target since April when the loss of one of its three biggest clients, Allied Domecq, sent its shares plunging.Reuse content