Militant shareholder fund Active Value continues to buy shares in Cordiant Communications, in a determined effort to block WPP Group’s &£266m bid for the stricken marketing services group.
Active Value has acquired over 25 per cent of shareholders’ votes, which could be used to prevent WPP’s takeover proposal going through at a shareholder’s meeting in mid-July. It is not expected to block Cordiant’s &£160m disposals programme, which will go to a vote at a separate shareholders’ meeting this week. The disposals are said to be regarded as non-core, but the money realised from them is vital to Cordiant’s survival.
Even so, it is unclear how Active Value could leverage its position, still less take control of Cordiant. Blocking WPP’s proposal would result in immediate administration for Cordiant. And WPP, which is thought to have secured about 70 per cent of Cordiant’s debt, would be in prime position to benefit from any break-up. The remainder of the debt is owned by aggressive hedge fund Cerberus Capital Management.
Active Value is reported to have been in talks with Grey, which shares top clients such as British American Tobacco with Cordiant. Cordiant earlier opened its books to Grey and Publicis Groupe as well as to WPP. But Grey chief executive Ed Meyer was later thought to have washed his hands of a possible deal (MW June 5). Active Value’s founders, Julian Treger and Bryan Myerson, have links with former adman Richard Wheatly, most recently chief executive of Jazz FM.