WPP and Martin Sorrell Submit Rival Bids for Digital Creative Agency -- Update

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 [e-mail]

(END) Dow Jones Newswires

July 03, 2018 11:45 ET (15:45 GMT)

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