PUBLICIS PULLS OUT OF CORDIANT DEAL

'Exclusive and Advanced Negotiations' Underway With WPP

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LONDON (AdAge.com) -- Publicis Groupe today said it will not best the offer made by rival WPP Group to purchase troubled Cordiant Communications Group, thereby paving the way for WPP to complete the acquisition.

Earlier today, Cordiant and WPP issued a

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joint press statement today claiming they are in "exclusive and advanced negotiations with a view to the acquisition by WPP of Cordiant by means of a recommended scheme of arrangement." The two agency holding companies said they intend to make another statement in the near future.

No 'overbidding'
"I did not want to engage Publicis in a course of overbidding, and considered that our last offer was fair and reasonable," Publicis Groupe's chairman, Maurice Levy, said in a statement.

London-based Cordiant is the parent of advertising network Bates Worldwide and other marketing communications companies.

'Safe Haven'
Toby Hoare, group chief executive of Bates UK, said, "I'm delighted that we seem to have concluded this long saga. The majority of our clients and our people will find safe haven within WPP, where there are opportunities that don't exist in Cordiant."

WPP's most recent offer as of mid-afternoon today is $430 million for Cordiant's debt and $17 million for its equity, an executive familiar with the situation said. Cordiant's debt is $421 million.

That executive said that under the current plan, WPP is likely to align Bates' business with its J. Walter Thompson network in the U.S.; in continental Europe, it would be aligned with Red Cell; and in the Far East, Bates would be aligned with Y&R Advertising.

Zenith ownership
It is likely Publicis Groupe will buy Cordiant's 25% stake of Zenith Optimedia Groupe pursuant to the terms of a current agreement, the executives said. Publicis owns 75% of Zenith.

The current scheme requires the approval of Cordiant shareholders. A final agreement could be reached by the end of July.

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