WPP has said it is prepared to increase its shareholding in ADK if Bain Capital’s tender offer falls through.
WPP, which owns a stake of nearly 25% in ADK, reiterated in a statement that it rejects Bain Capital’s bid to buy ADK because the bid undervalues the company, “its assets and future opportunities”. The tender offer expires on 21 November.
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Despite having been highly critical of ADK’s business strategy and leadership, WPP said it wanted to “clarify our commitment” to the Japanese company. It said it “would welcome the opportunity to engage constructively with the board of ADK if the tender offer fails to help ensure ADK has the talent and focus on digital and animation” necessary to increase its value.
WPP said subject to approval by other relevant parties, it would increase its stake in ADK to 33%. The suggestion of working to strengthen ADK, which WPP has not raised in its previous statements on the takeover bid, can be seen as a further effort to persuade ADK shareholders to unite against Bain. The deal will collapse if fewer than 50.1% of shareholders agree to sell their holdings.
In its nine-month financial results issued earlier this week, ADK reiterated its intention to sever ties with WPP. The two companies have long had a fraught relationship, which both have called unproductive. However, WPP agencies rely on the partnership with ADK to buy media in Japan.
Should Bain’s bid fail, a return to positive relations looks unlikely unless WPP is able to effect a change in ADK’s management. Shinichi Ueno, ADK’s president and CEO, has said publicly that the alliance is effectively at an end regardless of whether or not Bain’s deal is successful. WPP attempted to oust Ueno in March, but nearly 60% of shareholders voted to re-elect him.