WPP Starts to Plot Future Of Cordiant's Assets

With the fate of Cordiant Communications Group decided last week, the next question in the saga of the holding company's dissolution is where its clients' business will land.WPP, which won approval to buy the company from CCG shareholders last Wednesday, is ironing out the details of how best to service CCG's clients, sources said. The deal is set to close Friday.One major conflict could be Bates' estimated $160 million pan-European account for Spanish automaker Seat, a rival to WPP's largest client, Ford. Sources said Grey Worldwide chairman Ed Meyer flew to Barcelona recently to meet with top Seat execs. Grey refused to comment. Another closely watched client is London-based Cadbury Schweppes, whose $30 million in business at Bates consists of brands formerly part of Adams, acquired in March from Pfizer. Bubblicious, Burst, Certs and Dentyne, among others, are expected to move to WPP's J. Walter Thompson, which has former Adams brands Halls and Trident. "We're looking at the situation," said a client rep, who would not comment further.Bates' Pfizer brands—including Actifed, Benadryl, Neosporin, Rolaids and Visine—will go to JWT, according to sources. A Pfizer rep did not return calls. JWT already has Pfizer's Listerine, Efferdent and Tucks. JWT's Manhattan headquarters is expected to absorb more than 100 staffers—primarily those on Pfizer and Cadbury—from Bates' New York office. Bates' back-office and support staff will likely be laid off, said one source. A WPP rep said real estate issues and layoffs are yet to be decided; he would not comment further.CCG's assets bolster WPP's relationships with shared clients including Pfizer, Heineken, Estée Lauder, Johnson & Johnson, Kraft, Microsoft and Nokia, which comprise a quarter of CCG revenue. In June, when WPP announced it had a deal to acquire CCG, company sources said WPP would likely align Bates' offices with JWT in the U.S., Red Cell in Europe and Dentsu Young & Rubicam in Asia. CCG's 141 marketing services unit, Healthworld and its Fitch design shop will likely remain as stand-alone agencies—WPP CEO Martin Sorrell believes they are more valuable when available to any part of the network, and as stand-alones, are less prone to conflicts. WPP's OgilvyOne, which picked up British American Tobacco's Pall Mall in April, will work with 141 on BAT's Kool and duty-free business. At Estée Lauder, a rep confirmed that Bates is still the New York company's agency, adding that WPP has not said where the account will land. Bates client T. Rowe Price does not expect to hear how WPP will handle its account for a month, a rep for the Baltimore-based mutual fund firm said. (JWT is an unlikely destination, as it already works for competitor Merrill Lynch.) "Our expectation would be to stay with the [Bates] team if that team stays intact," the rep said.CCG shareholders approved the WPP offer, which is paying them just $17 million for a company whose market capitalization was $2.2 billion three years ago, with recrimination. "Past and present Cordiant management are responsible for destroying the value of the company, and Martin [Sorrell] took advantage of that," said Julian Treger, a partner in U.K. fund managers Active Value, CCG's largest shareholder with a 29 percent stake.

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WPP Starts to Plot Future Of Cordiant's Assets

Ann M. Mack

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Ann M. Mack