A report today said that Cordiant CEO Michael Bungey had been holding informal discussions with Publicis, which owns the Saatchi & Saatchi advertising agency.
Only in September, Bungey told the media that the company was not in any talks nor had it been approached about a takeover. Since then, however, the company has warned that profits for the full year will be down by 9% and that its programme of lay-offs had been extended to 1,100 staff.
Speculation has been rife for sometime that the troubled UK group would hook up with the French company, ignominiously reuniting it with Saatchi & Saatchi. The two split when Cordiant plc was broken up in late 1997 to form Cordiant Communications Group (new home to Bates Worldwide and Scholz & Friends) and Saatchi & Saatchi plc.
The two are already linked through their media-buying interests. The two jointly owned Zenith Media and, earlier this year, they agreed to combine their media-buying operations in a deal that saw Optimedia and Zenith Media come together to create one of the world's largest media-buying networks.
Publicis has not been as hard hit as Cordiant by the downturn in the ad market. In November, it reported a 45% rise in third-quarter revenues to £2.3bn.
The takeover speculation led to much movement in both companies' share prices. Cordiant hit a high of 104p when the market opened this morning, but fell back to 94p, down 0.53% on yesterday's closing price. Publicis, listed in Paris, was up 2.85% this morning, valued at €28.90.
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