Cordiant reports 1st-half loss

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London-based Cordiant plc announced a $47 million pre-tax loss Tuesday for thefirst half of 1995 and the proposed sale of direct marketing network Kobs &Draft Worldwide to a management buyout team. Cordiant, the holding company foragency networks Saatchi & Saatchi Advertising and Bates Worldwide, posted anoperating profit of $11.7 million but incurred $17 million in exceptional costsand a $43 million loss on disposals, mainly for the sale of U.S. agency CampbellMithun Esty and the closure of overseas CME offices. The $450 million in lostbusiness from Mars Inc. and British Airways will only be felt in the second halfof this year.

Kobs & Draft has long been rumored to be unhappy within Cordiant, whosestatement explained the deal by saying, ``The proposed future development of theKobs & Draft Worldwide network is not in line with the financial and investmentpriorities which Cordiant is now following." Cordiant is selling Kobs & Draftfor a total of $27.2 million, including $13.7 million in cash, $9.5 million inloan notes and $4.5 million in preferred stock. Separately, Cordiant has theoption to buy up to 25% of the company. The Chicago-based company now will beknown as DraftDirect Worldwide.

Cordiant blamed much of the company's poor performance on its agencies in theU.S., where first-half revenue fell by 13.5% compared to last year.

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