Fund manger Active Value Investors, which is now Cordiant's single largest shareholder, began talks with WPP yesterday as Sir Martin Sorrell's group put together a revised offer for Cordiant after its first bid was blocked.
The new offer halted efforts by hedge fund Cerberus Capital Management, which is working with Publicis to force Cordiant into administration and pick off the assets of the group they are interested in.
The administration effort is opposed by WPP and Active Value, which holds 16.7% of Cordiant. Active Value until now has been pushing for a new management team to replace Cordiant's chiefs and for the group to remain independent.
The investment fund has proposed Richard Wheatly, former head of Jazz FM and Leo Burnett, as chairman to replace chief executive David Hearn.
WPP, on the other hand, is bidding to buy the whole company. On Sunday, WPP offered debt holders more than £246m, beating the joint Publicis/Cerberus offer of £244m, which was later raised to £245m.
Yesterday, Hearn said that all prospective bidders, lenders and the board were struggling to try and "reach a resolution in the face of some quite difficult issues".
Hearn said he was hopeful that the company would get a "final resolution imminently".
A source close to WPP was yesterday quoted as saying: "WPP is looking at a different proposal to the one put to it yesterday afternoon [Sunday]". However, its new offer is described as not being "higher", but different.
If it can win the support of Active Value, which could as part of the deal become a WPP shareholder, it would see off the challenge from Publicis, which yesterday said it was in talks with Cordiant to buy "certain assets".
Publicis is interested in marketing services firm 141 Communications, Cordiant's 25% stake in ZenithOptimedia and advertising agency Bates Worldwide. It understood that Cerberus would acquire design firm Fitch and healthcare ad business HealthWorld.
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