WPP has moved to take full control of its Australia/New Zealand holding group, known as WPP AUNZ.
WPP AUNZ was formed in 2016 with the merger of STW Group, then Australia’s largest ad/marketing group, with WPP operations in the region.
At the time the deal was valued at about $625 million and WPP took a 61.5% stake in the company with additional shares traded in Australia's public markets. WPP said its new offer valued outstanding shares at about $133 million or a premium of about 34% over the current trading price.
The holding company said the move was aligned with its effort to streamline its overall structure. In a letter outlining the proposal WPP COO Andrew Scott stated, “As a 61.5% majority shareholder and a partner in many of WPP AUNZ's businesses, we remain committed to WPP AUNZ, however, our ability to deploy resources and assist the business is limited by the current shareholding structure. We believe that we are best able to support WPP AUNZ in maximizing its potential by moving to 100% ownership.”
Scott added that “we remain cautious of the environment and agree with the sentiment of WPP AUNZ CEO Jens Monsees regarding the current level of economic uncertainty in the regions in which WPP AUNZ operates and we are mindful of the weak trading conditions currently impacting WPP AUNZ.”
Independent directors of WPP AUNZ are considering the offer and have retained UBS and a legal firm as advisers.
The agreement is subject to shareholder and regulatory approvals and WPP expects it to close next year.