Active Value aims to block Cordiant plan as WPP bids

Active Value, the fund manager that has increased its stake in troubled advertising firm Cordiant Communications, is threatening to block the restructuring of the group unless the company looks at its alternative plans.

The move comes as media giant WPP is finalising a bid for the company that would come under the current share price of 4.75p.

Active Value is frustrated that a separate proposal from WestLB to refinance the group as a going concern is being held back, as the investment bank is not being given crucial information on Cordiant's working capital. The fund manager is threatening to vote against the disposals of Cordiant's German and Australian businesses, and last week bought 10 million more shares, taking its holding above 16 per cent.

"Active Value are going to vote against the disposals," said a spokesman for Active Value. "Frankly they have had enough of not being taken seriously." A Cordiant spokesman said: "WestLB have been supplied with ample information to come up with a viable scheme."

Shareholders are furious that Cordiant's managers are being given bonuses on the sale of the group. Last week a shareholder circular said that chief executive David Hearn will get his New York apartment paid for until next June, even if he leaves the company, while chairman Nigel Stapleton gets an extra £2,000 a day if he works more than his two-day-a-week, £200,000-a-year contract. A spokesman said the payments were fair.

Julian Treger, one of the managers behind Active Value, said the vote on its plans to oust the current management and inject up to £40m into Cordiant is being "deliberately delayed". He said more than half the shareholders had approached the fund manager to pledge their support.

The advertising group's clients are understood to be keen to be taken over by a rival, though they do not like Publicis' plan to put the group into administration before buying its businesses. One senior Cordiant insider said: "Three or four clients have called us and said if Cordiant goes into administration it's time to put the cat out and get your pyjamas."