Martin Sorrell Beats WPP in Bidding War for Dutch Marketing Firm

anastasios pallis

Martin Sorrell, the former chief executive of the advertising giant WPP who is now trying to build a new ad company, beat out his former employer for the purchase of a Dutch marketing firm on Tuesday, a move that WPP claimed could endanger millions of dollars in his stock awards.

Mr. Sorrell’s new firm, S4 Capital, said in a statement that it had bought MediaMonks, which has 11 offices and more than 750 employees. The marketing firm brings in about 110 million euros ($129 million) of annual revenue, and buying it is S4 Capital’s first move in creating “a new era, new media solution embracing data, content and technology,” the statement said.

The purchase price was €300 million, or about $352 million, and will be paid in cash and stock, according to a person familiar with the deal who spoke on the condition of anonymity to discuss specific details.

The acquisition was contentious because WPP, which ousted Mr. Sorrell in April, was also bidding for MediaMonks. Last week, lawyers for WPP sent Mr. Sorrell, 73, a letter saying that he was risking his future stock awards, worth millions of dollars, by aiming to buy the firm.

The letter said that WPP started considering buying MediaMonks in November, and that Mr. Sorrell, who was the conglomerate’s chief executive, “was heavily engaged in this process.” As a result, the pursuit was unlawfully diverting a “maturing business opportunity from WPP” and would most likely breach his confidentiality agreement, the letter said.

WPP said in a statement on Tuesday that it stood by what its lawyers said last week. “Despite subsequent protestations from Sir Martin’s lawyers, we are well aware of the facts, and he has jeopardized” his long-term incentive plan entitlement, a spokesman said.

A spokesman for Mr. Sorrell said the executive “vigorously denies the allegations and is confident that the facts will do the talking.”

Mr. Sorrell was also the subject of a recent report in The Financial Times detailing allegations of bullying behavior, and one in The Wall Street Journal that said his departure from WPP was preceded by a company investigation into whether he had visited a brothel and used WPP money to pay a prostitute. Mr. Sorrell has denied both reports.

“We have a huge amount of respect for Sir Martin,” Wesley ter Haar, founder and chief operating officer of MediaMonks, said when asked about the allegations. “This company is being built on a foundation of culture that MediaMonks already has in place, so we will be building a company for the next generation, which is all about diversity and inclusion.”

He added that the highlight for the company was “the ability to work with a legend in the industry that has disrupted the industry before and is planning to do so again.”

S4 Capital plans to be publicly traded in coming months by using an existing company’s listing and expand through acquisitions. Mr. Sorrell is its executive chairman and contributed 40 million pounds, or $53 million, of the firm’s initial equity funding.

MediaMonks, whose clients include Amazon, Johnson & Johnson and Netflix, will receive shares in S4 Capital and cash as part of the acquisition, according to the statement on Tuesday.

This article is from NYT – go to source

Leave a Reply

Your email address will not be published. Required fields are marked *