The battle for Netherlands-based digital production company MediaMonks, which both WPP and Martin Sorrell’s S4 Capital have bid on is coming to a head.
And it looks like Sorrell is going to win the battle. But the war? That remains to be seen.
Sources confirm press reports that S4 and Mediamonks are close to announcing a deal—as early as Tuesday—that S4 will acquire the agency for about $350 million. The FT reported over the weekend that S4 sweetened its offer with an equity stake in the firm for the main MediaMonk stakeholders.
But over the past week WPP has asserted that the acquisition may be “unlawful” because it believes Sorrell used information known to him while he was still running WPP (he left in April) to help facilitate the S4-MediaMonks deal in violation of a non-disclosure agreement.
WPP has also let it be known that Sorrell may be jeopardizing future payouts of more than $20 million per the terms of his separation agreement with the holding company.
What’s unclear for now is whether WPP will back up all of its squawking with some sort to legal action to block the S4 deal, if it really believes it to be “unlawful.” As for the future payouts, Sorrell seems unfazed and has asserted that he has violated no agreement with WPP in pursuit of Mediamonks. It’s not like he needs the money, but clearly he’ll fight for it if he believes that’s the case and WPP tries to withhold.
There are some who believe that WPP’s saber rattling has more to do with quelling wrath from certain investors who are angry that the holding company let Sorrell go without some sort of non-compete agreement.
Guess we’ll find out soon if WPP really thinks it has a case to prevent S4 from completing the acquisition.