ACTIVE VALUE UPS CORDIANT STAKE

Latest Purchase Increasing Stock Holdings to 24.5%

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LONDON (AdAge.com) -- Active Value has upped its stake in Cordiant Communications to 24.53%, just short of the amount needed to contest WPP Group's takeover bid, according to a statement issued by London Stock Exchange.

Active Value, a U.K.-based investment firm, is the largest shareholder in Cordiant and initially had tried to block any sale of the advertising company until new corporate officers are installed. The firm had expressed concern about bonuses to be paid to Cordiant CEO David Hearn and Finance Director Andy Boland if the company was sold.

Shareholder vote
WPP must gain the support of 75%

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of Cordiant's shareholders for its $440 million bid to succeed. There is still a month to go before the shareholder meeting, giving Active Value ample time to raise its stake above the 25% required to spoil the plans of WPP's chief executive, Martin Sorrell.

A Stock Exchange statement issued today revealed that fund managers Active Value has bought a further 2.5 million shares at 4.92 cents, upping its holding to 102,388,099 shares. Last week Active Value raised its Cordiant holding to 23.94% from 16.7%.

If Active Value succeeds, it will have to force Cordiant into administration and, along with any ally, pick off its assets, which include marketing-services specialist 141 Worldwide and Healthworld as well as Bates Worldwide.

Teaming with Grey?
There have been press reports that Active Value may team up with Grey Global Group's Grey Worldwide to put forward a package to rival WPP's. Grey and Cordiant's Bates Advertising share a major client in British American Tobacco.

Other reports claim that Active Value may yet team up with U.S. hedge fund Cerberus Capital Management, which still owns a $130 million debt holding in Cordiant.

'Situation is fluid'
A source close to Active Value refused to rule out any of the possible combinations. He said, "The situation is fluid. There are lots of potential outcomes and we still have a long way to go. We are not competing against WPP, we are just looking to get the best deal as a shareholder."

Under the terms of the WPP deal, Cordiant shareholders will receive $17 million between them, while its creditors -- except for Cerberus, which refused to let go of its debt -- will be paid in full.

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