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London (pte036/17.06.2003/14:14) - International PR and advertising firms WPP-Group and Publicis are locked in a battle over British ad agency Cordiant Communications http://www.cordiantww.com .
While Publicis originally appeared to hold the advantage in negotiating a take over, WPP now seems in a better position, reports the Wall Street Journal (WSJ). WPP has managed to outbid French agency Publicis with an offer of 246m pounds (348.5m euros).
Publicis first offered 244m pounds, then added another million. The French communications group was also considered a favourite due to its partner, New York firm Cerberus Capital Management. Cerberus controls a fourth of Cordiant's debts.
However WPP's new offer is not just more financially lucrative. According to WSJ, a takeover through Publicis is being blocked by British American Tobacco (BAT), one of Cordiant's most important clients. BAT has threatened to leave if Publicis wins the deal, because Publicis's agency Leo Burnett does advertising work for BAT's competitor Philip Morris. Cordiant could not afford to lose BAT's business.
Cordiant has been available for a takeover since April when it lost one of its largest clients, beverage firm Allied Domecq. In early June the ailing ad agency sold its 77.3 per cent share in German agency Scholz & Friends.
Cordiant CEO David Hearn expects a decision on the takeover to be made soon.
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