David Blecken
Nov 21, 2017

WPP backtracks, agrees to sell ADK stake

Bain Capital is apparently closer to taking control of Japan's third-largest advertising agency, ending a 20-year partnership with WPP.

WPP CEO Sir Martin Sorrell
WPP CEO Sir Martin Sorrell

WPP has agreed to sell its stake in ADK to Bain Capital for the original price of 3,660 yen (US$33) per share.

The development comes after prolonged wrangling in which WPP had argued that Bain’s offer undervalued ADK. Earlier this month, WPP initiated legal proceedings to contest ADK’s moves to end a 20-year partnership between the two companies. Later WPP said it would increase its stake in ADK if the Bain bid were dropped.

It is not fully clear why WPP has backtracked on what has been a consistently combative position towards Bain’s takeover bid, and WPP has yet to respond to Campaign's request for comment. However, it appears likely that WPP and Bain reached an understanding based on the possibility of future collaboration that could prove beneficial to WPP. A statement issued by Bain following initial coverage of WPP's move says:

"In the event that Bain Capital is able to take ADK private, Bain Capital will discuss with WPP a potential investment by WPP as a non-controlling minority shareholder in a Bain Capital investment vehicle that directly or indirectly owns the interests of ADK. Any future cooperation will be discussed in good faith by both parties."

In the statement, Bain managing director David Gross-Loh said his company was pleased at the "orderly termination of the current alliance" between ADK and WPP.

As a result of the agreement, the tender offer, which was due to expire today, has been extended until 6 December. To take control of ADK, Bain requires 50.1% of investors in the Japanese company to sell their shareholdings. Silchester International Investors, ADK’s second largest shareholder, and Hong Kong-based Oasis, have also voiced opposition to Bain’s takeover bid.

This article has been updated to take into account Bain Capital's statement on its agreement with WPP.

See all our coverage of the ADK-WPP fight over Bain's bid

 

Source:
Campaign Japan

Related Articles

Just Published

5 hours ago

Publicis to award Arthur Sadoun $12 million ...

Share award is worth ten times his annual salary.

12 hours ago

Creative Minds: The witty Denstu wordsmith on ...

Anamika Thakur wishes to remind her younger self to trade grades for grass (not the objectionable kind).

16 hours ago

2023 Cannes Contenders: UltraSuperNew picks top ...

The group creative director at UltraSuperNew picks standout campaigns that have a chance of scoring at Cannes this year.

17 hours ago

Asia-Pacific Power List 2023: Hikaru Adachi, FamilyMart

Adachi has masterminded a series of buzzworthy campaigns for the leading Japanese convenience store chain which have resulted in record breaking sales.