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WPP in bidding war with Sorrell's new ad agency

Sir Martin did not sign a non-compete agreement on stepping down from WPP
Sir Martin did not sign a non-compete agreement on stepping down from WPP

WPP is going head-to-head with the advertising business set up by its former chief executive, Sir Martin Sorrell, as the pair battle to take over Dutch business MediaMonks.

The Financial Times on Monday reported that S4 Capital had lodged a bid for MediaMonks, in what would be its first purchase since Sir Martin took the helm of the company and pivoted it towards advertising.

It is thought that, at the time, S4 Capital was fairly confident it would emerge as the winning bidder in the auction, which is being run by Clarity Corporate Finance.

However, less than 24 hours later, WPP's own interest in the Dutch advertising agency emerged.

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It is not known how much either side offered for the business, with bids having been due last Friday, but it is thought the offers being put forward are in the range of €250m (£220m) to €300m.

Both Accenture and Inflexion are also thought to have put forward offers for MediaMonks, which handles the advertising for companies including Lego, Mercedes and Audi.

A spokesman for MediaMonks said it was "flattered to be mentioned in this context", but said beyond that it would not comment on "speculation".

Inside story - The day it all ended for WPP's Sir Martin Sorrell
Inside story - The day it all ended for WPP's Sir Martin Sorrell

News that WPP and S4 Capital are already engaged in a bidding war, just over a month after Sir Martin took over S4 Capital, follows comments by the advertising mogul in late June referring to the new venture as a "peanut" in comparison with WPP.

Sir Martin did not sign a non-compete agreement on stepping down from the company, causing concern among some investors that he would steal business away from his former employer.

However, reports suggested last month that Sir Martin had been in talks with WPP shareholders, to assure them he would not be seeking to harm the company through heading up the S4 Capital business.

The man behind WPP | Sorrell’s rise to power
The man behind WPP | Sorrell’s rise to power

During his three-decade reign at WPP, he was well-known for his strategy of growing through acquisitions, and managed to transform WPP from a small company which made wire baskets into a global advertising titan comprised of 400 separate businesses. 

Sir Martin, who had been one of the best-known FTSE 100 bosses, quit WPP abruptly in April amid an investigation into alleged misconduct, details of which have been kept private by the company. Sir Martin has denied allegations of wrongdoing.