White knight bidder may come to aid of troubled Cordiant

The prospect of a white knight bid for Cordiant emerged yesterday after the beleaguered advertising group said it had received several possible takeover approaches.

The development came one day after the company's market valuation fell by two-thirds when it admitted being in emergency refinancing talks with its banks and to losing one of its biggest clients, Allied Domecq.

Cordiant, led by David Hearn, has been under severe financial pressure for more than a year but the company said the approaches were "very preliminary" and "may or may not lead to an offer". The shares clawed back some of the previous day's losses, jumping 10 per cent to 11p, which valued the company at £45m. Unless Cordiant, which owns the Bates Worldwide advertising agency, manages to release its financial results for last year by tomorrow its shares will be suspended. This would require clinching an eleventh-hour refinancing plan.

Publicis of France, the world's number four advertising company that acquired parts of Saatchi & Saatchi from Cordiant six years ago, was touted by analysts as the most likely bidder. Paul Richards, at Numis Securities, said: "The current climate is to make do ... rather than merge and acquire, but ... for the right buyer there is a lot of value. It's got to be Publicis."

Publicis already has a relationship with Cordiant; the two partner each other in Zenith Optimedia, the media services company. Other possible suitors for Cordiant include Sir Martin Sorrell's WPP and Omnicom and Interpublic of the US, analysts said. They noted, however, that potential buyers were probably better off just cherry picking Cordiant's best assets, to avoid the company's £250m debt.

Cordiant, which has put its City public relations agency Financial Dynamics up for sale, has said it retains the confidence of its banks and is working "constructively" to amend the financing terms. It said on Monday that it was "actively investigating alternative strategic options" in addition to a disposal plan announced in February.