Cordiant to be delisted in move to stymie Active Value

Cordiant Communications is to delist on July 16. One of the side-effects of delisting is to crystallise the option to sell 25 per cent of Zenith Optimedia to Publicis Groupe at £75m.

The effect of the move is to restrict the leverage of Active Value, the group of militant shareholders which is seeking to block WPP Group’s £266m agreed bid to buy Cordiant (MW last week).

Under certain conditions, for example putting Cordiant into administration, the effective value of the option would be reduced to about £2.5m, jeopardising the £160m Cordiant disposals programme, of which Zenith forms a significant part. Delisting prevents this. WPP, as Cordiant’s £256m creditor, has threatened to put the company into administration if Active Value fails to agree to its terms. “Our offer is our offer,” says WPP chief executive Sir Martin Sorrell.

Administration means shareholders would receive nothing, instead of the £10m they are being offered by WPP. Active Value would need to come in with a bid of about £295m to trounce the WPP offer.

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