In January M&A publication MergerMarket reported that Mark Penn’s Stagwell Group was reported to be in the “advanced stages of a sales process,” with multiple bidders submitting offers of $1 billion or more.
So the question posed in the headline is rhetorical and the answer is you betcha. At the right price. Stagwell is backed by venture capitalists. They buy stuff so they can sell it later at a profit. And Stagwell has a fiduciary responsibility to consider all reasonable offers.
A deal never materialized, possibly due to the pandemic which likely spooked a lot of investors given the hit the economy took.
But don’t think that Penn’s subsequent proposal in June to merge MDC Partners and Stagwell is some sort of fallback plan.
According to people familiar with the situation, Penn has had his eye on MDC almost since he formed Stagwell back in 2015. As you may remember that was the year that things started to fall apart at MDC, when the firm was investigated by the SEC and the Justice Department for financial improprieties. It turned out that former CEO Miles Nadal had been taking millions from the company in inappropriate “expenses” (jewelry, vacations, cosmetic surgery, that sort of thing). He ended up paying it all back, plus penalties.
In subsequent years, when Scott Kauffman took over as CEO at MDC, Penn made several merger overtures to the company, to no avail, according to sources.
When Penn invested $100 million in MDC last year and took over as CEO, he agreed to a one-year “stand-still” agreement, precluding any effort on his part to make a further investment in the company. According to sources, the idea there was to have him fully focused on fixing the company not acquiring more of it, which he is now free to do.
MDC has reported progress as merger talks continue.