WPP shocked Adland today with an announcement that it was acquiring Martin Sorrell’s S4 Capital for an undisclosed price.
With the purchase, Sorrell returns to the WPP board. He will head the compensation committee.
Investors drove the stock down 15% on the news.
The deal took many industry watchers by surprise, as it was just a year ago that Sorrell and WPP had a very acrimonious parting of the ways. Sorrell had been CEO for 30-plus years.
Sorrell, as you will recall, was investigated for misconduct. WPP never really spelled out the charges in detail, although there were allegations of misuse of company funds for things like family vacations as well at least one very, um, adults-only rendezvous, shall we say. Sorrell denied wrongdoing.
Over the past year, Sorrell frequently took potshots at the holding company as it mapped its course for the post-Sorrell era.
He criticized the company’s way of handling his departure and its choice of leadership to succeed him. He also pooh-poohed the firm’s “transformation plan” to get back on a more profitable course.
Even more galling, from WPP’s standpoint was Sorrell’s success in outbidding it for MediaMonks, the digital content creation firm, and now a cornerstone in the digitally focused S4.
But now all that animosity appears to be water under the bridge. “It just feels like the right time to bury the hatchet,” said WPP CEO Mark Read in a statement confirming the agreement.
“And I know just where to bury it,” added company chairman Roberto Quarta, who many believe led the effort to force Sorrell out of the company a year ago.
“I have an ax, Roberto,” Sorrell retorted. “Axes are bigger than hatchets. So Roberto, you know what that means: Mine’s bigger than yours. And I can think of a place I’d like to bury mine, if you get my drift.”
Now now boys, remember, water under the bridge and all that rot.
And don’t forget what day it is. Happy April Fools’ Day!