Simon Gwynn
Jun 5, 2018

WPP investor pressure to sell Kantar could open door to Sorrell acquisition spree

A sale of Kantar would be "favourably viewed by investors who have come to dislike the data business", according to a financial analyst.

WPP investor pressure to sell Kantar could open door to Sorrell acquisition spree

Investor pressure is likely to force WPP into selling Kantar, possibly along with other assets—which could open opportunities for Sir Martin Sorrell's new vehicle S4 Capital.

Brian Wieser, senior research analyst for advertising at Pivotal Research Group, said today that a sale of Kantar would be "favourably viewed by investors who have come to dislike the data business", while a failure to dispose of it would be "negatively received".

Wieser mentioned WPP’s investments in ComScore, Globant, Vice and AppNexus as other assets that could be liquidated to help keep up WPP’s share price, which has been on a downward trajectory since February 2017.

The analyst also warned against WPP appointing an outsider as Sorrell’s permanent successor, saying: "There is a risk that the new chief executive will not be an insider, which we think could cause further disruption in the management ranks and in the business itself."

While joint acting-chief operating officer Mark Read is among the favourites for the job, Oath chief executive Tim Armstrong has also been tipped.

'Kantar would be obvious buy for Sorrell'

Sorrell confirmed last week that S4 Capital, his investment vehicle, was undertaking a reverse takeover of publicly listed company Derriston Capital. Sorrell is the executive chairman of the merged company.

The former WPP chief executive resigned six weeks ago following an investigation into allegations of personal misconduct. 

Ian Whittaker, head of European media research at Liberum Capital, said that Martin Sorrell’s new company S4 Capital, which Sorrell confirmed the launch of last week, would be a potential bidder for Kantar, as suggested by French financial paper Les Echos last month.

"If he’s talking about getting into data then those assets [WPP’s data investment management businesses] would be an obvious buy," Whittaker said. But he added that Accenture and other consultancies would also be interested.

A quick sale of Kantar and other parts of WPP’s business was likely, Alex DeGroote, owner of DeGroote Consulting, said: "the problem WPP has got is being plausibly able to ignore attractive offers for any assets. The investment community expects a whopping profits warning in the next few weeks."

Campaign UK

Related Articles

Just Published

13 hours ago

How to prepare for hybrid commerce: Chinese ...

As consumers seamlessly hop between physical and online, brands are expected to provide real-time stock information and personalised experiences across all of their touchpoints. But they must demonstrate a value exchange to consumers to collect the data they need.

13 hours ago

Data shows brands don’t need social media accounts ...

Data from a Jing Daily report shows that luxury brands no longer rely on their own social media accounts in China with more engagement relying on KOLs.

14 hours ago

Apple debuts 2022 Chinese New Year film (clear some ...

The company's offering for this year is a 23-minute epic—shot on iPhones—about the making of an epic film within the film, also shot on iPhones.

14 hours ago

How women’s health brands communicate on social ...

Female founders of women’s health brands say censorship makes it challenging to properly address women’s concerns.