Shares in Cordiant, owner of Bates Worldwide and Scholz & Friends, were valued at 109.5p around midday, an increase of 3.8% on yesterday's close.
Publicis announced this morning that it plans to raise as much as £372m through a bond issue, which it says it will use to reduce debt and cut financing costs. However, the market is looking at the possibility that the funds could be used to make a takeover bid for the ailing Cordiant, which has spent the last 12 months issuing profit warnings and making 1,100 staff redundant. Cordiant is believed to be worth around £420m at the moment.
However, both companies have repeatedly denied that they are in merger talks, most recently in the week before Christmas. Any deal between the companies, which last year merged their Optimedia and Zenith Media media-buying operations, would see Publicis reunited with ad agency Saatchi & Saatchi. The two companies parted ways in 1997.
The news of Publicis' bond issue has forced its share price down this morning. It was trading at €29, down from a close of €30.50 yesterday.
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