WPP Buys CCG Debt from Cerberus

NEW YORK WPP Group has moved ahead in its effort to acquire troubled Cordiant Communica-
tions Group, paying $149 million for CCG’s remaining debt held by Cerberus Capital Management.

WPP said it paid $18.2 million over the par value paid to the rest of the holders of CCG’s $424 million in debt. The Cerberus payment is included in the previously announced $51 million of CCG reorganization costs, WPP said.

The move comes amid a flurry of activity this week in the ongoing CCG saga. London-based fund management group Active Value increased its stake in CCG to more than 25 percent, enough to block a WPP buyout. Meanwhile, German bank WestLB withdrew its recapitalization proposal for CCG, sources said.

On Tuesday, Active Value purchased an additional 2.5 million shares to increase its holding to 104.9 million CCG shares, or 25.13 percent of the company. Subsequent purchases have pushed Active Value’s stake to more than 26 percent.

WPP needs the approval of 75 percent of CCG’s investors to close the deal. Both companies are based in London.

Active Value has argued that WPP’s offer, which pays shareholders a token $17 million, doesn’t provide enough to them.

Earlier, Active Value had thrown its support behind WestLB, which also put forth new management to be installed at the troubled holding company. Those executives, Richard Wheatly, the former chief of London radio company Jazz FM and a Leo Burnett alumnus, and WestLB banker Stephen Davidson are still backing Active Value’s efforts. It is not known if a recapitalization plan is still envisioned since WestLB had pledged to raise the capital needed for CCG’s revival.

Executives with WestLB did not return calls.

This story updates an item posted on June 25.