Active Value owns 14.1% of Cordiant and, according to a report in the Financial Times, it is looking to keep the company independent by offering 拢15m of a proposed equity injection of between 拢35m and 拢40m.
It has been suggested that Richard Wheatly, former chief executive of Jazz FM, and Stephen Davidson, former chief executive of Telewest and currently a banker at WestLB, should be installed as the new executive chairman and finance director respectively. Shareholders would then be asked to oust the existing board, including Hearn.
News that Active Value has its own plan for Cordiant comes as three holding companies, WPP Group, which confirmed its interest last night, Publicis Groupe and Grey Global Group, consider bids for the company.
Active Value was behind a push in 2002 to oust former chief executive Michael Bungey after troubles at Cordiant, including the loss of the crucial $160m (拢98m) Hyundai account. Hearn's promotion from running Bates Worldwide to running the holding company was supposed to help turn around fortunes at Cordiant.
Instead, it has lost a string of other clients, including UK work for Woolworths, the Post Office and the 拢18m account for Allied Domecq. B&Q is also reviewing its arrangements with Cordiant over fears that if it went bust, it would be left with no advertising agency. It is thought that Cordiant will try to include the B&Q account to make the company more attractive to potential bidders.
The company has sold a 70% stake in its Australian operations, including the advertising agency George Patterson Bates, for 拢24.6m, as it tries to keep itself afloat with debt of 拢250m.
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