PERSPECTIVE: Of all the bidders in the Cordiant battle, WPP may fit the best

The ongoing battle for Cordiant Communications has thrown up some interesting counter-casting. Contrast, in the red corner, weighing in on behalf of WPP, advertising's most inventive dealmaker, king of bathtub analogies, Sir Martin Sorrell! And in the blue corner, bent on media domination, the Gallic godfather, Publicis' Maurice Levy! Two other, smaller players have shaped the story; Grey, teamed up with Cerberus, a US hedge fund, and Active Value, the biggest shareholder in Cordiant, which waded into the takeover battle last week by proposing a boardroom coup led by Richard Wheatly and an unnamed advertising CEO.

As we go to press, the WPP bid, for as little as £120 million for a £300-plus million revenue company, looks most likely to succeed. But the spin from all sides continues apace. In the world of the advertising holding companies, where you are only as good as your last deal, or attempted deal, or rumoured deal, such claims and counter-claims are all par for the course.

It's easy to see the strategic fit within WPP, even though Cordiant has sold off many of its crown jewels, including, this week, Germany's Scholz & Friends. There are some notable shared clients (BAT and Pfizer globally and, in the UK, Sky) while the only major client conflict is Seat with WPP's bedrock Ford business. Cordiant's 141 (CRM), Fitch (design) and Healthworld (healthcare) offer WPP further expertise in fast-growing areas. Finally, Bates' Asian businesses would bolster the group in one of its key growth markets.

For Publicis, the strategy is less clear. If the ownership of Cordiant changes, it has in any case first dibs on Cordiant's 25 per cent of ZenithOptimedia (though we can be certain that Sorrell would have some fun with the small print when selling anything to Maurice). BAT and Pfizer would be unlikely to move into the Publicis group due to conflicts with Philip Morris and Johnson & Johnson. What would it therefore be buying?

Active Value, the gobby shareholder with 14 per cent of Cordiant, has an obvious motivation in not wishing to sell when the share price is so disastrously low, but its aim to revive the group may ultimately be beaten by the 15 July deadline when the banks are due to withdraw their credit line.

Even before the dust has settled on the Cordiant debacle, I can identify its two overwhelming messages. First, the combination of a highly cyclical business such as advertising with a highly geared balance sheet is a recipe for disaster. Second, in cynically incentivising themselves specifically to sell the doomed business while leaving shareholders almost penniless, Cordiant's existing management has done the image of advertising enormous harm in City terms. It's just as well that, taking a long-term view, advertising has some huge successes to its name in shareholder terms - namely WPP itself and the Saatchi & Saatchi sale to Publicis.

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