WPP's About Face On ADK: Holding Company Agrees To Tender Its Shares

Another strange twist has occurred in the fight over Japanese ad agency ADK. For months, the agency’s single-largest shareholder, WPP (with an approximate 25% ownership stake) had been fighting an effort by ADK management to take the company private, via a $1.3 billion tender offer from Bain Capital. 

WPP was joined by several other shareholders in arguing that Bain’s offer significantly undervalued the agency, which WPP has been allied with for nearly two decades. 

But earlier today, Bain issued a statement saying that WPP had switched course and has now agreed to sell its shares in the agency at the price stated in the tender offer. 

Bain has also extended the offer a second time to Dec. 6. It still requires at least 50.1% of ADK’s common shares being tendered in order for the deal to go through. 



There was no explanation from WPP on its decision to tender its shares after refusing for so long to do so. 

Bain said if the deal goes through, WPP also agreed to end the legal proceedings it launched in Japan earlier this month in a bid to kill the tender offer. 

The investment company added that if the tender succeeds, Bain would “discuss” a potential re-investment by WPP in ADK via Bain. “Any future cooperation will be discussed in good faith by both parties,” Bain stated. 

Why would WPP want to do that? Hard to say, other than Japan is an important market for any global ad holding company and ADK is the third-largest agency behind Dentsu and Hakuhodo, neither of which appear to be looking for a major new stakeholder. At least for now. 

What happens if the tender doesn’t succeed? That is unclear.

Other major investors have opposed it, including Silchester International, a London-based investment firm with a 17%-plus stake in ADK. Like WPP, Silchester is on record saying Bain’s price is too low. Not that it means much now, given WPP’s about-face. 

So stayed tuned. This saga has a ways to go.

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