New ownership for Cordiant Communications could emerge as early as this week as the troubled agency network faces a July 15 deadline with creditors.
WPP is conducting a due-diligence review of Cordiant’s books, Reuters reports. WPP is thought to be interested in buying Cordiant as a whole (minus some Australian and European units that are already being sold off separately). That presumably would include promotions network 141 Worldwide.
Meanwhile, Publicis is reported to be negotiating a deal for Cordiant to file for administration (the U.K. version of bankruptcy) and let Publicis buy its assets. (Paris-based Publicis and London-based Cordiant are co-owners of agency Zenith Optimedia.) Analysts speculate that a third possibility is a forced debt-for-equity swap via New York-based Cerberus Capital Management, the news report said.
Debt-laden Cordiant lost a string of clients, including global client Allied Domecq, who worried about the holding company’s financial viability (Xtra, April 29 and May 13). It may also lose one of its largest remaining clients, home improvement chain B&Q, based in Australia, the report said. Most of 141 Worldwide’s offices have a healthy slate of local clients who aren’t concerned about global reach. In the U.S., 141’s New York City office is hardest hit by the loss of AD.
