Plot Thickens In WPP Fight Over $1.3 Billion Bain Tender Offer

Looks like WPP, the biggest single stakeholder (nearly 25%) in publicly-traded Japanese agency ADK has found an ally in its fight to thwart a $1.3 billion tender offer for the agency by Bain Capital.

The ally is Silchester International Investors, which is the second biggest stakeholder in the agency, with a little more than 17% of the company.

The tender offer launched earlier this week.

WPP hasn’t commented on the matter, but sources familiar with the situation say the holding company believes Bain’s offer significantly undervalues the agency.

Silchester has issued an investor note that agrees with that assessment, saying the offer “substantially undervalues ADK, its assets, franchise and future opportunities.”

The investment company also slaps around the ADK board pretty nicely for supporting the tender offer, saying in so many words that it failed to execute proper due diligence in seeking out the best possible offer for the agency.



Slichester also charges that the ADK board botched its sale of WPP shares held by the agency by rushing through a sale of those shares at a time when the holding company’s valuation is depressed. That triggered tax liabilities and valuation fees to the detriment of shareholders.

“The sale was done without prior consultation and without shareholder approval,” the investment firm asserted.

“When will the boards of public companies—and ADK’s Board specifically—realize that when a private-equity group promises high returns to underlying investors and wants to buy a business from a public company, there is every probability that the business is underpriced and any sale is to the detriment of the existing public shareholders?” Silchester wrote.

Yes, you can just tell that Silchester wanted to call the ADK board members a group of friggin' idiots, which I guess they sort of did indirectly.

No way this tender is going through, unless Bain sharply ups the offer. Stay tuned.


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