Yahoo Finance Sorrell's S4 Capital beats WPP in bidding war for Dutch agency MediaMonks
Sir Martin Sorrell's new advertising venture has emerged victorious in a bidding war against his former employer WPP, scooping up its first acquisition in a move likely to spark further conflict with the FTSE 100 giant.
S4 Capital will announce tomorrow it has struck a cash and shares deal to buy MediaMonks, after outbidding rivals WPP, Accenture and Inflexion.
Although it will not disclose how much it has agreed to pay for the Dutch advertising company, whose clients include Lego, Adidas and Google, its offer was thought to be in the region of €300m (£266m).
Confirmation of the purchase is likely to ramp up tensions with advertising conglomerate WPP which last week sent a letter to Sir Martin warning that, in making an offer, he was likely to be in breach of confidentiality obligations and so may be stripped of his outstanding share awards.
Even though Sir Martin's exit as WPP chief executive was abrupt, coming after he grew "fed up and p****d off" during a probe into alleged misconduct, he was treated as having retired from the company, and had been eligible to receive around £20m in share awards.
The letter, written by lawyers and first reported on by Sky News, had also claimed WPP had been looking into a MediaMonks bid last November, while Sir Martin was still chief executive, and that he was heavily involved in talks with the Dutch company prior to stepping down.
It marked a break-down of relations between WPP and Sir Martin who, prior to the MediaMonks auction, had seemingly been on good terms.
Speaking in late June, after it emerged Sir Martin was setting up a new advertising business, he referred to it as a "peanut" in comparison with WPP, and reports suggested last month that he had been calling investors of the FTSE 100 group to reassure them that he was not looking to harm the company, at the request of WPP.
He had, however, not signed a non-compete agreement on leaving WPP, leaving some shareholders unhappy with how his departure had been managed.
Sir Martin had held the chief executive position at WPP for three decades and was instrumental in transforming the business from a small wire basket operation to a conglomerate comprised of 400 separate businesses.
Details of the investigation into alleged misconduct which led to Sir Martin's resignation have been kept private by the company, and he denies allegations of wrongdoing.
