UK advertising agency Cordiant Communications has denied reports that it is in talks over a possible takeover by French rival Havas Advertising.

A spokesman for Cordiant told the Reuters news agency that he was unaware of talks with Havas at any time during the last six months.

On Sunday, the Observer newspaper reported that Cordiant was mulling a 1bn euro offer from Havas, adding that the deal could be done within two weeks.

The reports came as Cordiant, once part of legendary advertising group Saatchi & Saatchi, continues to struggle with falling revenues in the wake of last year's economic downturn.

Financial woes

The company's 2001 pre-tax profits fell by more than half compared with the previous year to 25.7m.

In April, Cordiant warned that it did not expect sales to grow this year.

Havas is thought to be on the lookout for potential acquisitions in order to keep pace with a wave of consolidation in the global advertising industry.

The French advertising giant raised about 450m euros through bond sales last month, partly in order to fund acquisitions.

Earlier this year, Havas launched an unsuccessful attempt to buy up its French rival Publicis.

It subsequently targeted the media buyer Tempus, but was outbid by UK advertising firm WPP.

Advertising revenues have slumped worldwide over the past two years due to the dotcom collapse, the economic downturn, and the 11 September attacks.