Cordiant's biggest investor rebuffs rebel bid for change

The largest shareholder in Cordiant Communications, the advertising company, has come out in support of the current management rather than rebel shareholder Active Value.

There had been speculation that David Herro, a fund manager at Chicago-based Harris Associates, was supporting activist investor Active Value, which is agitating for change.

Active Value is thought to be building up its stake in Cordiant so that it can call for an emergency general meeting to push for management changes. Harris Associates owns nearly 10 per cent of the company, while Active Value owns just over 9 per cent.

But in an exclusive interview with The Independent on Sunday, Mr Herro said that he was not working with Active Value and he believed that it was not in the company's interests to create a public fuss.

"I agree [with Active Value] on some issues, but don't agree on some tactics," he said. "Generally, shareholders prefer matters to be worked out internally rather than [with] a big public stink."

He criticised some management decisions at Cordiant, but said the current board of directors had the matters in hand. He stopped short of supporting chief executive Michael Bungey.

"The belief in the shareholder base is that the company is analysing the situation and ... [that] efforts are being made to rectify the situation."

He added: "I do think that the problems are going to be dealt with by the board of directors." Active Value refused to comment.