New ownership for troubled Cordiant Communications Group could emerge this week. WPP Group is thought to have made a bid for London-based Cordiant in full, including promo network 141 Worldwide. WPP, London, won’t comment beyond its June 3 statement that it is conducting due diligence to decide whether to make an offer.
The Wall Street Journal reports that WPP proposes to acquire Cordiant’s $400 million-plus debt at a discount and pay its equity shareholders a nominal amount. Cordiant has a July 15 deadline with creditors (June 3 Xtra). Any offer would have to be approved by Cordiant shareholders; if a bid fails, Cordiant would go into receivership and its assets could be sold off in pieces.
Observers say Publicis or Grey and investment firm Cerberus Capital Management may be interested if it comes to a fire sale but it’s unclear whether WPP would have interest in pieces of Cordiant. Any deal would require another 60 to 90 days of due diligence before closing. Some 141 offices may be ripe for management-led buyouts during that time.
WPP would benefit from Cordiant’s Asian presence as well as its health-care and direct-marketing expertise, reports The Wall Street Journal. WPP could integrate Bates and 141 offices geographically, aligning them with its own agencies in each city to offer multiple disciplines in each market. That would dismantle the worldwide network that 141 pioneered for clients such as Allied Domecq and British American Tobacco.
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