FORM 6 - K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the Month of May 2003
CORDIANT COMMUNICATIONS GROUP PLC
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(Translation of registrant's name into English)
121-141 Westbourne Terrace
London W2 6JR
England
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the File Number assigned to the registrant in
connection with Rule 12g3-2(b): _________.
FORWARD LOOKING AND CAUTIONARY STATEMENTS
This report contains certain "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Generally, the
words "believe," "may," "will," "estimate," "continue," "anticipate," "intend,"
"expect" and similar expressions identify forward looking statements. The
Registrant has based these forward looking statements largely on its current
expectations and projections about future events and financial trends affecting
its business. These forward looking statements include statements relating to
trends in the advertising and marketing services industry, particularly with
respect to anticipated advertising expenditures in the world's advertising
markets. Actual advertising expenditures may differ materially from the
estimates contained therein depending on, among other things, regional, national
and international political and economic conditions, technological changes, the
availability of media and regulatory regimes in the world's advertising markets.
Additionally, this report contains a number of "forward looking statements"
relating to the Registrant's performance. The Registrant's actual results could
differ materially from those anticipated, depending on, among other things,
gains to or losses from its client base, the amount of revenue derived from
clients, the Registrant's exposure to changes in the exchange rates of major
currencies against the pound sterling (because a substantial portion of its
revenues are derived and costs incurred outside of the United Kingdom), the
general level of advertising expenditures in the Registrant's markets referred
to above and the overall level of economic activity in the Registrant's major
markets as discussed above. The Registrant's ability to reduce its fixed cost
base in the short term is limited and therefore its trading performance can be
significantly affected by variations in the level of its revenues.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CORDIANT COMMUNICATIONS GROUP PLC
(Registrant)
By: /s/ David Hearn
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Title: Director and Chief Executive Officer
Date: May 30, 2003
Exhibit 1
CORDIANT COMMUNICATIONS GROUP PLC
("Cordiant")
PRESS RELEASE
Disposal of a 70% interest in Cordiant's principal Australian businesses.
Cordiant has entered into an agreement conditional on, amongst other things,
shareholder approval, to dispose of a 70% interest in its principal Australian
businesses ("The Communications Group" or "TCG"), including George Patterson
Bates. It is proposed that TCG is acquired by The Communications Group Holdings
("TCGH"), a new corporate entity, which on completion will be owned 55% by funds
advised by Pacific Equity Partners, 15% by TCG management and 30% by Cordiant.
This transaction represents a first step in Cordiant's stated plan to reduce
debt through a programme of non-core asset disposals.
The cash proceeds payable to Cordiant in respect of the disposal of TCG are
A$61.2 million ((pound)24.6 million) which, after deduction of transaction
costs, will be used to repay debt. Prior to completion, Cordiant will also
extract surplus cash of A$41.0 million ((pound)16.5 million) which will be used
to reduce net borrowings.
The retention by Cordiant of an equity interest in TCG through TCGH is
consistent with the practice of other international agency groups, many of which
have established or retained a presence in the Australian market through
minority equity stakes. The Bates Group will continue to service its existing
international clients in the Australian market through TCGH, which will, as part
of the transaction, enter into network membership agreements with each of the
Bates Group networks, in order to preserve continuity of service levels.
The Campaign Palace, one of Australia's leading creative agencies, which has
always operated independently of George Patterson Bates, is not included in the
transaction and will remain part of Cordiant.
In a separate transaction, it is intended that Cordiant will sell its interest
in Western Australia based agency Marketforce to its management.
The Communications Group
The Communications Group is one of Australia's largest advertising and marketing
communications groups, and provides a range of services to its clients including
advertising, brand strategy, marketing strategy, media planning and buying,
direct marketing, customer relationship management, public relations, sales
promotion, interactive services, graphic design
and retail store design. The Communications Group has approximately 900
employees, with its main offices located in Sydney, Melbourne, Brisbane and
Auckland.
George Patterson Bates, the main component of TCG, was founded in 1934 and
acquired by Bates Worldwide in 1964. In recent years TCG has expanded its
service offering into branding and design, public relations, sales promotion,
interactive and healthcare agencies.
In the year ended 31 December 2002, TCG's businesses on a combined basis
generated revenues of A$128.4 million ((pound)51.6 million) and profit before
tax of A$5.1 million ((pound)2.1 million). Net assets attributable to TCG as at
31 December 2002 were A$21.1 million ((pound)8.5 million).
David Hearn, Chief Executive, commented: "This is a good deal for Cordiant and
for the clients and employees of our Australian businesses. This transaction
will allow the Bates Group to continue to service its international clients
effectively whilst at the same time executing the first stage of our debt
reduction programme."
Separately the Board continues to advance its other discussions as indicated in
Cordiant's announcement of 12 May, and is seeking to bring them to a conclusion
in the near future in the best interests of the Group and its clients. However,
none of the proposals currently under consideration is likely to result in an
offer at or near the current share price.
A circular will be sent to shareholders in due course seeking their approval for
the disposal of TCG.
29 May 2003
Enquiries:
College Hill Tel: +44 207 457 2020
Alex Sandberg
Adrian Duffield
Note: The exchange rate used in this announcement is A$2.49 to GBP(pound)1.00 as
at 28 May 2003