Cordiant Hatches Plot to Foil Raiders; Ad Giant Brings in US Executive to Bolster Top Management
Rees, Jon, The Mail on Sunday (London, England)
Byline: JON REES
ADVERTISING giant Cordiant plans a major shake-up of top management as part of a campaign to fend off a threatened assault by corporate raiders.
Cordiant's chief executive Michael Bungey is hammering out details of an audacious preemptive strike to secure his position at the company - second largest advertising group in Britain and eighth largest in the world.
He plans to bring in David Hearn, chairman and chief executive of the group's main advertising arm in New York, Bates Worldwide, to become the chief operating officer. Crucially, Hearn will report to Bungey.
The move is intended to draw the sting from criticisms by aggressive investors Julian Treger and Brian Myerson, who head fund management group Active Value.
Last week, Active Value upped its stake in Cordiant to nine per cent and is expected to call for an extraordinary general meeting of shareholders to lobby for changes at Cordiant.
The share price has fallen by more than 50 per cent in a year.
Cordiant demerged from the wreckage of the old Saatchi & Saatchi empire in 1997.
While its sister agency Saatchi & Saatchi was bought by French advertising group Publicis, Cordiant remains independent.
Bates, its main advertising arm, produces adverts for a host of high-profile clients including BSkyB, Woolworths, and British American Tobacco.
Treger and Myerson are understood to be demanding the appointment of a senior executive, possibly from outside the group, who would 'work alongside' Bungey himself, so effectively supplanting him.
They are also understood to be considering demanding the appointment of a new chairman to replace long-serving Charlie Scott.
Active Value's longer-term intention is believed to be to attract a bid from French group Havas, which has long been touted as a possible buyer for Cordiant, despite its regular denials of interest. …