Struggling media giant WPP has sold a 49.9% stake in one of the City’s top PR agencies, Finsbury, in a partial management buyout which will see svengali Roland Rudd move to become chairman.
The deal comes as the culmination of a year of talks in which Rudd was first attempting to buy outright the business he founded back from the stricken conglomerate.
In the event, WPP is to sell Finsbury into a three-way merger with German agency Hering Schuppener Consulting and US lobbyist Glover Park Group.
Hering managing partner Alexander Geiser will become chief executive of the new firm to be called Finsbury Glover Hering.
The combined management team will be investing in the venture, which a statement said “will be driven by the highly entrepreneurial spirit that inspired its founder firms”.
Rudd, 59 and seen as one of the City’s best connected executives, will serve as co-chairman alongside GPG founder Carter Eskew.
Rudd has long lauded Geiser, leading him to be seen for years as a potential successor at Finsbury although it had not been clear how that might come about.
Financial terms were not disclosed but WPP will retain a 51.1% stake in the new joint venture with the combined management buying the rest.
The three companies have been working together as partners since 2016 and 2017 but will now have equity stakes in the joint venture. The new company will launch in early 2021.
Finsbury has for years vied with Brunswick as to represent the UK’s biggest FTSE-100 firms.
Rudd, a former Financial Times journalist and brother of former Home Secretary Amber Rudd, founded Finsbury in 1994 and sold it to WPP 18 years ago for a speculated £60 million.
Since then it has grown rapidly and merged with US PR firm Robinson Lerer & Montgomery in 2011.
The sale comes as part of WPP’s overhaul following the departure of its founder Sir Martin Sorrell.
At one stage it was said the business would be worth £100 million but the impact of covid on the economy will have reduced that significantly, analysts said.
The deal means Finsbury partners will be able to use equity in the combined business to incentivise staff.
WPP has been selling businesses and integrating others in a drastic bid to save costs amid cut throat competition from technology companies and consultancy firms who have switched to serve corporate clients’ advertising and marketing needs.