City File: WPP's poker game is likely to run

Reports that WPP, Martin Sorrell's advertising group, is home and dry with its refinancing after improving the terms being offered to convertible preference shareholders look a trifle premature.

Fidelity, the largest holder of preference shares, is still threatening to vote against the package. A number of other large holders are taking a similarly obstinate position. One said: 'They claimed the company would go into liquidation and we wouldn't get a thing if we didn't accept the last set of proposals. Eventually they were forced to improve. Now they are saying the same thing again but they really will have to do better to win my approval.'

Under the proposals, bankers are being asked to convert about 20 per cent of their debt into equity. Preference holders have the whip hand, since the plan requires them to approve by a majority of 75 per cent. It looks as though the poker game being played over WPP's future has a lot further to run.