WPP dropped 3.25% in early afternoon trading but by 3pm was down 4% on yesterday's closing price to trade at 680p. Ford is WPP's largest client, representing between 6% and 8% of its business.
However, WPP was keen to point out that it had been aware for two years that Ford would be reviewing agency remuneration arrangements.
A spokesman for WPP said: "These are normal negotiations with the client to achieve an effective and competitive arrangement."
Ford's advertising is split globally between Ogilvy & Mather and Young & Rubicam, with media planning and buying through MindShare.
However, the good news for the group is that investment bank JP Morgan said it was rating WPP as a "core media holding", with a price target of 795p. In the past 12 months, WPP's share price has hit a high of 900p in March 2001, and a low of 428.5p when it was embroiled in the Tempus takeover, which finally concluded in November.
In a research note, JP Morgan said: "WPP is a scale and quality play on a recovery within European media. It is a pure play on expanding marketing budgets globally, which we believe should show signs of improvement in the second half of 2002."
Yesterday, it was revealed that WPP-owned ad agency J Walter Thompson had scooped the £84m Domino's Pizza account. Other big clients for the group include IBM and Coca-Cola.
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