Nahed Ojjeh, the Paris-based widow of a Saudi billionaire, has built up a 10.75 per cent stake in the heavily indebted UK advertising group Cordiant, the company revealed last night.
The motives of Mrs Ojjeh, a wealthy chess patron, are unknown, adding uncertainty to the Cordiant endgame. The company has agreed to be acquired by WPP, the world's third-largest advertising company, which is headed by Sir Martin Sorrell. But Active Value, a fund which controls 29 per cent of Cordiant, has said it intends to block the deal.
According to Cordiant, Mrs Ojjeh said in a letter from her lawyer, dated 5 July, that she has had "no contact at this time" with Active Value. Her stake is held in her name, through members of her family and an offshore entity she controls.
WPP has bought all of the Cordiant's debt for £255m, and if shareholders do not approve its £10m bid for the company's equity at a meeting scheduled for 23 July, WPP has said it will tip Cordiant into administration. If that happens, shareholders, including Active Value and Mrs Ojjeh, will receive nothing.
WPP has refused to sweeten its offer of one WPP share for every 205 Cordiant shares. At yesterday's closing prices, Cordiant's shares would be worth about 2.48p under the deal. Cordiant's sharesclosed yesterday at 3.65p, valuing its equity at £14.8m.
Mrs Ojjeh's letter to Cordiant said she acquired her stake between 10 June, before WPP's buyout offer was made, and last Friday, 4 July. Her interest in the company was first revealed last week, when it emerged she had paid £235,000 for a 2 per cent stake.
Active Value last week said it had not had any contact with Mrs Ojjeh. It declined to comment further last night.Reuse content