NEW YORK The often bizarre and convoluted struggle for control of Cordiant Communica-
tions Group came to an end on Wednesday as investors overwhelmingly approved WPP Group's $16 million bid for the beleaguered parent of Bates.
At an extraordinary meeting in London, 99.17 percent of CCG shareholders voted in favor of the deal, which required a 75 percent majority. In the end, CCG's largest shareholder, London fund management company Active Value, which had threatened to veto the sale over the amount of payout to investors, approved the transaction.
Active Value spent more than $56 million in buying its CCG stake.
Paris-based chess promoter Nahed Ojjeh, who recently acquired more than 10 percent of CCG, had a representative at the meeting but did not disclose her intent in buying her CCG holding at levels above WPP's offering price.
Following the approval of the WPP transaction, Active Value asked CCG shareholders to vote on a resolution requesting a change in management at the company. As a result, chairman Nigel Stapleton has been replaced on an interim basis by Rolf Stomberg, a CCG senior independent non-executive director and five-year board member. Also, David Hearn and Andy Boland have left the board, but continue in their roles as CCG chief executive and finance director, respectively.
At the meeting, the London investment fund asked that the three executives give up lucrative bonuses. The three men refuse to do so.
In June, Hearn, Stapleton and Boland renegotiated their contracts to include payouts amounting to a total of up to $5.7 million should they sell the company. Active Value managing director Brian Myerson decried the "excessive rewards for failure that the board of Cordiant are receiving for bringing this company to its knees." He added, "All of those responsible are due to receive large payments, despite their wholesale destruction of Cordiant's value for shareholders, while shareholders are left with very little."
Myerson also pointed blame at the non-executive directors, as well as the company's financial advisors at UBS Warburg, saying they should have intervened on behalf of the shareholders. He called the situation "unacceptable," and said that Active Value is "well advanced in bringing legal action against certain of these parties to recover losses which shareholders have suffered."
The acquisition is expected to close August 1.
This story updates an item posted earlier today