City mystery as chess queen challenges media knight in bid war battle

City takeover battles don't come much more mysterious or exotic than this. On one side is Nahed Ojjeh, chess enthusiast, daughter of a former Syrian defence minister and multimillionaire widow of a Middle Eastern arms dealer.

On the other side is Sir Martin Sorrell, a 58-year-old Harvard business school graduate who leads Britain's largest advertising empire but is arguably more famous as recipient of one of the most generous pay packages in British business history.

At stake are the remnants of the seminal advertising company built up in the 1980s by the Saatchi brothers, Maurice and Charles. Their business has since fallen on hard times and, laden down with debts, Cordiant Communications was about to succumb to a takeover by Sir Martin's WPP group. Sir Martin, a takeover whizz-kid who prides himself on never losing a deal, had seen off a rival takeover attempt by Publicis, a French advertising giant and appeared to be home free.

So far, so ordinary. But then strange things started to happen.

A week ago, Mrs Ojjeh emerged as a 2 per cent shareholder in Cordiant, paying more than £200,000 for her shares. No one knew why a Paris-dwelling chess queen would do that, but since the money was chicken feed to her, nobody paid much attention.Then, on Tuesday evening, a short stock exchange announcement revealed Mrs Ojjeh had increased her stake in Cordiant to 10.75 per cent, making her total holding worth £1m. Again, her intentions remained a mystery.

What on earth could Mrs Ojjeh be up to?

She could not be reached yesterday for comment. Her assistant said yesterday: "Mrs Ojjeh is on holiday. She isn't in Paris. She will be back on 1 September." Whatever her intentions, Mrs Ojjeh is certainly one of the more exotic individuals to have graced the business pages of the national press in many a year. The daughter of General Mustafa Tlas, the former hardline Syrian defence minister, she later married Akram Ojjeh, who was described as "one of the [Middle East's] most efficient military intermediaries".

A decade ago, Mrs Ojjeh hit the headlines again through an association with Roland Dumas, who was France's Foreign Minister at the time. Apart from romance, she seems particularly interested in chess. On her website, entitled "Who is Nahed Ojjeh?", she talks gushingly about her ambition to take chess to the masses, championing its teaching in schools so the West can rival the chess masters of the East. She liked the game so much she bought a Paris chess club and tried to set up a new world chess championship. But she fell out with the British media company the Einstein Group, over sponsorship.

Her stepsons are also worthy of mention. Mansour Ojjeh, one of Akram Ojjeh's sons, is vice-chairman of the TAG Group, best known for the TAG Heuer watches. TAG now owns Farnborough airport and a stake in McLaren, the Formula One motor racing team.

Among those who would like to know a little more about her is the Takeover Panel, which presides over British takeover bids. Yesterday it confirmed that it was investigating the recent share dealings to decide whether they were disclosed sufficiently promptly.

There was also speculation yesterday that the Financial Services Authority and the Department of Trade and Industry may get involved, the latter over a possible breach of the Companies Act. That requires the timely disclosure of stakes over 3 per cent in publicly quoted UK companies.

That could cause embarrassment for some of the blue-chip City names involved, even if they are not to blame for any late disclosure. The first two tranches of Mrs Ojjeh's stakes were acquired though CCF Banque Privée, a division of HSBC. The City law firm Simmonds & Simmonds is also involved as part of Mrs Ojjeh's legal team. The other shares appear to have been bought via a British Virgin Islands-based company called Dacord using an online account. It is also awkward for Cordiant's advertising clients, such as British American Tobacco and BskyB, which have already been unnerved by the company's perilous financial position, brought about by a series of expensive media acquisitions at the height of the internet boom.

But why would someone with all that wealth and all those international connections be bothering with a nearly bust advertising agency?

The word in City circles yesterday was it was all to do with the battle for control of Zenith Optimedia, a media buying agency in which Cordiant owns a 25 per cent shareholding while Publicis, the French group, owns the rest. It is one of the most valuable assets in the crumbling Cordiant empire.

The gossip circulating London's Square Mile yesterday was that the whole share-buying exercise might be a complicated way of enabling Publicis to gain sole control of Zenith on the cheap.

There does appear to be a connection between the glamorous Syrian chess patron and Publicis. Mrs Ojjeh is a friend of Elisabeth Badinter, the chairwoman of the Publicis supervisory board and the daughter of the company's founder, the late Marcel Bleustein-Blanchet. Ms Badinter also controls 35 per cent of Publicis's shares.

There were rumours that Mrs Ojjeh had met Publicis representatives several times in recent weeks. It was further suggested there had been discussions between Publicis and Active Value, a British fund management group which had built up a 27 stake in Cordiant.

The conspiracy theory goes that Mrs Ojjeh and Active Value might be somehow working together to wrench control of Cordiant away from WPP- and from Sir Martin.

If it were to emerge the two had acted in concert, their combined 37 per cent stake would trigger a takeover bid for the whole of Cordiant.

Under City rules, the bidders would be obliged to pay shareholders the highest price at which it has bought shares in the past 12 months. That is 76p per share, compared to the current WPP offer of just 2.4p per share. It would be for the Takeover Panel to decide whether an investigation is necessary.

However, Publicis denied yesterday it had any connection to Mrs Ojjeh. Active Value has already said that it has no link with her. The air of mystery may suit Madame Ojjeh but it is a source of immense frustration for Sir Martin who has built up a formidable company boasting such famous advertising names as Ogilvy & Mather and Young & Rubicam. He usually gets what he wants - but, then again, he has never before been competing against the chess-loving Syrian widow of an arms dealer.

THE RIVAL

Sir Martin Sorrell thrives on the cut and thrust of a takeover deal, using all his guile to outfox his rivals. It was once said that negotiating with him is like "trying to stab a dolphin with a banana".

Short and stocky, with immaculate pin-striped suits and preppy round glasses, he looks more like an investment banker than an advertising guru.

He is not always a popular acquirer of companies. Chris Ingrams, the former head of the Tempus media buying agency, reportedly said he would "sooner lick the floor of an abattoir" than work for Sir Martin. Mr Ingrams has always denied he said this. And then Sir Martin took the company over.

The 58-year-old graduate of Christ Church, Cambridge and Harvard Business School has turned himself into one of the world's leading advertising men.

It all started in 1985, when Sir Martin bought into a supermarket basket maker called Wire & Plastic Products and turned it a media powerhouse.

The former Saatchi & Saatchi finance director snapped up J Walter Thompson and Ogilvy Mather, but huge debts almost brought the company down in the early 1990s. Undeterred, he built it up all over again, earning himself a fortune in the process.

Though a tough operator, he can still charm the press, returning calls with speed. He breakfasts at Claridge's, loves cricket and even plays for the WPP team. He opens the batting, naturally.