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Active Value takes stake in Cordiant up to almost 27%

LONDON - As expected, Active Value has continued to increase its stake in Cordiant, buying another 2m shares taking its holding in the ad group to almost 27%.

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Active Value's stake stake now stands at 26.69%. The latest round of share-buying, follows news that shareholders in Cordiant will have to vote on the WPP Group acquisition plan and Active Value's recapitalisation plan on July 23, after giving the go-ahead at the weekend for the sale of the group's Australian and German assets.

It had been thought that Active Value, which raised its stake in Cordiant to 26.21% on Friday, might block the asset sale as a way of flexing its muscles in the run-up to a final showdown with WPP.

However, the fund manager backed the sale of the disposal of a 70% stake in Cordiant's principal Australian operations, The Communications Group, and the group's 77% stake in Scholz & Friends at a extraordinary general meeting on Saturday.

At the meeting on July 23, Cordiant shareholders will consider the two deals one after the other, with the vote on the WPP deal preceding that on Active Value's proposal to replace Cordiant's top three executives with its own management team.

It has still not been revealed who Active Value plans to name as chief executive of its management team to work with its proposed chairman Richard Wheatly, the former Leo Burnett and Jazz FM chief, and Stephen Davidson as finance director.

Cordiant said it had been told that the person lined up for the CEOs role was "a senior executive" in one of the world's biggest ad groups. Speculation is centring on ousted McCann-Erickson chief, Ben Langdon, who has been revealed to be involved in talks with Active Value.

At the July 23 meeting, the first order of business will be the court administered meeting to consider WPP's bid, which requires 75% of shareholder support.

With Active Value's stake standing at almost 27%, it now has the power to defeat WPP's bid. If Active Value does block WPP, Cordiant will go into administration where, with Sir Martin Sorrell's WPP in control of the debt, the ad giant will stand a good chance of picking up the assets it wants.

Cordiant last week sent a letter to shareholders recommending that they not support the bid and at the weekend Cordiant chairman Nigel Stapleton warned that it would be "very damaging" if WPP's proposal was not accepted.

Last week, WPP acquired a further £90m of debt in Cordiant from Cerberus Capital Management, which was earlier linked to bids by Publicis and Grey Global, adding to the £256m of debt WPP had bought from Cordiant's banks.

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