WPP and Martin Sorrell Submit Rival Bids for Digital Creative Agency -- Update
July 03 2018 - 11:00AM
Dow Jones News
By Nick Kostov
Ad giant WPP PLC and its former CEO Martin Sorrell are already
competing against each other.
The ad holding company submitted an offer for Netherlands-based
digital creative agency MediaMonks ahead of last Friday's deadline
for bids to buy the firm, according to a person familiar with the
matter. A rival bid was put in by Mr. Sorrell's new venture, S4
Capital, another person said.
Founded in 2001, MediaMonks produces games, films and websites,
often to serve the needs of advertising agencies. It employs more
than 750 people and has offices in 11 countries around the world,
including in Amsterdam, Dubai, New York and Mexico City.
A spokeswoman for MediaMonks declined to comment.
The bidding war thrusts Mr. Sorrell into direct competition for
the first time against the company he spent three decades building.
Mr. Sorrell has said that S4 Capital is too small to compete with
the world's largest ad firm. But his stated interest in the
technology, data and content sectors places him firmly in a space
where ad holding companies like WPP are trying to grow,
particularly through acquisitions.
Mr. Sorrell resigned as CEO of WPP in April after The Wall
Street Journal reported that the company's board had been looking
into an allegation of improper personal behavior and whether Mr.
Sorrell had misused company assets. Mr. Sorrell rejected the
allegation "unreservedly." He has also more broadly denied any
wrongdoing.
Mr. Sorrell, who didn't have a noncompete clause in his contract
with WPP, announced in May plans to create S4 Capital.
Institutional shareholders made nonbinding commitments to
contribute more than GBP150 million, or about $200 million, to the
new firm for acquisitions, according to a stock-market filing at
the time.
WPP Chairman Roberto Quarta has called Mr. Sorrell's new venture
"a distraction" and said that he would watch whether Mr. Sorrell
respected confidentiality agreements with the company that cover
his deep knowledge of its operations and clients, as well as the
acquisitions it explored on his watch. Breaking those agreements
would jeopardize Mr. Sorrell's ability to collect a long-term share
award of as much as GBP20 million over the next five years, Mr.
Quarta added. A person close to Mr. Sorrell has said he is not
going to do anything that will risk his long-term benefits.
At an event in Cannes last month, Mr. Sorrell described his new
investment vehicle as a "peanut" compared with WPP, but added that
"some people have peanut allergies."
He said at the same event that S4 Capital would look "at a
number of opportunities in what I would call new era, new age."
That wasn't a criticism of WPP, he added, but "an acknowledgment
that the business has changed, and that life has changed."
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
July 03, 2018 11:45 ET (15:45 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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