WPP set to approve FD buyout following Cordiant acquisition accord

LONDON: WPP is expected to give the green light to the long-anticipated management buyout of FD International after it struck a deal last week to buy FD's flagging parent company Cordiant Communications, sources close the situation told PRWeek.

LONDON: WPP is expected to give the green light to the long-anticipated management buyout of FD International after it struck a deal last week to buy FD's flagging parent company Cordiant Communications, sources close the situation told PRWeek.

FD International's PR assets include FD Morgen-Walke in the US.

It had been previously reported that Cordiant had agreed to the MBO deal, but it then appeared likely to unravel when an unexpected takeover battle between Paris-based Publicis Groupe and WPP erupted over Cordiant, as the company appeared to be spiraling towards inevitable bankruptcy.

The MBO, the details of which have been in place for weeks, seemed to be thrown into severe jeopardy two weeks ago when Publicis and its US hedge-fund partner Cerberus Capital Management appeared on the verge of taking over debt-laden Cordiant. Reports said that Cerberus was interested in grabbing FD.

Nevertheless, WPP outmaneuvered its French rival and now appears ready to approve the original MBO. That deal is understood to value the PR agency at between ?25 million and ?30 million ($42 million and $50 million), includes a team of 25 partners at FD, and is backed by private-equity firm Advent International, according to a source.

One FD source expressed cautious optimism to PRWeek.

"At long last, it looks like this will happen," said the source. "There have been so many twists and turns that we will not really be pleased until we see it in writing."

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