According to reports, Cordiant is to sell the 67-year-old agency to venture capitalists for around 拢43m.
Cordiant shares were down 15.5% this morning, having already lost more than 90% of their value since 2000, raising the possibility that Cordiant could again be a takeover target.
Earlier this week, the group was hit by the prospect of losing its 拢25m Woolworth's account, which it has held for 17 years.
In an article in daily financial newspaper The Australian Financial Review it said that Pacific Equity Partners are negotiating to pay cash for a 70% stake in the agency, which includes Avis, Nintendo, Pfizer Lambert Warner and Seven Network among its clients.
The deal would leave Cordiant with a 20% stake in George Patterson Bates, with the final 10% being held by the management.
According to a spokesman for Cordiant: "The company are not going to comment on market rumour."
Last year, George Patterson Bates lost its managing director Hamish McLennan, who moved over to become CEO of Young & Rubicam Australia/New Zealand. He had been at the agency for 17 years and was being groomed for the CEO role.
The agency lost one of its biggest accounts 18 months ago when the Ansett budget airline, which billed A$40m, went under. It also lost FAI insurance, after its parent company HIH collapsed, and Diners Club.
Last year, Cordiant closed Bates USA West following the high-profile loss of the $160m (拢112m) Hyundai media and creative account. The agency, based in Irvine, California, closed in October with 20 employees and no clients. A year ago, it employed 150 staff and had annual billings of $275m. Hyundai was its biggest account.
The loss of Hyundai sparked a collapse in Cordiant's share price, which eventually led to the resignation of CEO Michael Bungey soon after Bates New York lost the $300m Wendy's fast food chain account. Bungey is to retire in March 2003 to be replaced by Bates Advertising chief David Hearn. Bungey's resignation was followed by that of Charlie Scott, the Cordiant chairman.
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