French Media group Publicis was last night poised to win control of the assets of Cordiant, the stricken advertising company, despite an improved offer from WPP.
Publicis is planning on Cordiant being put into administration and then, following a court ruling, Publicis will be able to snap up Cordiant's assets, probably as early as today. Publicis is thought to be particularly interested in key parts of Cordiant's Bates advertising agency, the OneonOne agency business, Cordiant's German operation and the remaining stake in the Zenith media buying agency it does not yet own.
The Publicis offer will settle 93 per cent of Cordiant's £250m debt, including a small payment of £8m-£12m to shareholders. This topped a last ditch offer by WPP which offered to settle 91 per cent of Cordiant's debt. This is the latest twist in a bid battle which has pitched two of the world's largest advertising companies against each other in a battle for control of the debt-laden Cordiant.
WPP claimed to have trumped Publicis' terms last night but then said it had been outmanoeuvred after Publicis made an agreement with Cerberus Capital Management - a US hedge fund which is also one of Cordiant's major creditors - that it will not sell its Cordiant debt to anyone but Publicis. Cerberus is expected to take control of Cordiant's Australian interests
Publicis spent the weekend frantically contacting staff and major clients, assuring them that there would be a smooth transition despite the impending administration, which would trigger change of control clauses in contracts. Cordiant's major contracts include BAT, Pfizer, B&Q and BSkyB. Publicis holds the Allied Domecq account which it won from Cordiant in a move which helped trigger Cordiant's demise.
The fate of Financial Dynamics, Cordiant's financial public relations agency, is still unknown. Executives of the agency had negotiated a deal to buy the company for £25m, backed by Advent, the venture capital group. However, this disposal has not yet been signed off and the directors, together with Advent, face fresh negotiations with Publicis.
WPP, which owns the Ogilvy & Mather and Young & Rubicam agencies, declined to comment on the outcome of the bid battle. Publicis also declined to comment.
The collapse of Cordiant represents a dramatic fall from grace for a company that spent the boom years buying up assets at inflated prices. Cordiant was spun out of the old Saatchi & Saatchi advertising empire which was later acquired by Publicis.Reuse content