WPP 'eyeing Cordiant'

Is Sir Martin mulling a bid?

Advertising giant WPP is considering a bid for struggling rival Cordiant, according to Sunday press reports.

Both the Observer and Sunday Times papers said WPP has been running the rule over Cordiant's financial situation ahead of a possible bid.

Cordiant's share price plunged in April this year after it lost the crucial account of drinks giant Allied Domecq.

However, analysts say WPP may face competition for Cordiant from firms such as France's Publicis.

Cordiant slump

The Observer and Sunday Times said WPP was conducting due diligence with Cordiant advisers.

This is despite previous reports that WPP's chief executive Sir Martin Sorrell was not interested in Cordiant.

Speculation about Cordiant's future increased in April after its share price fell by two thirds in one day when it lost the Allied Domecq contract.

The firm has been hit hard by the downturn in advertising spending, which has been caused by major corporations cutting their marketing budgets in the face of global economic uncertainty.

From a peak of 406p in March 2000, Cordiant's share price has tumbled and on Friday it closed at 5.5p.

Cordiant is in the process of selling off non-essential businesses including Financial Dynamics, its London-based public relations firm.