Bain Emerges as Leading Bidder for WPP's Kantar Unit
Bain Is Said to Emerge as Leading Bidder for WPP's Kantar Unit
(Bloomberg) -- Bain Capital is in exclusive talks to buy a majority stake in WPP Plc’s Kantar unit in a deal valuing the market-research business at about $4 billion including debt.
The buyout firm’s proposal is subject to negotiation and there’s no guarantee that talks will result in a deal, WPP said in a statement on Monday, which confirmed an earlier Bloomberg News report. The company was competing against Apollo Global Management, Platinum Equity and Vista Equity Partners in the final round of bidding, people familiar with the auction said previously.
The Kantar sale is part of WPP Chief Executive Officer Mark Read’s push to cut debt and simplify the global ad agency network after ditching his predecessor Martin Sorrell’s acquisition-fueled growth strategy.
The price being discussed appears to be in line with expectations and the exclusive talks should give confidence that a deal will be completed, allowing WPP to significantly reduce debt, Liberum analysts led by Ian Whittaker wrote in a research note.
WPP shares were up 0.3% as of 8:09 a.m. in London on Tuesday. The stock is up 20% so far this year.
Read is focusing on improving WPP’s digital marketing skills after losing work with some key consumer goods clients. The owner of agencies including Ogilvy and Wunderman Thompson has struggled with the shift to online marketing and faces a growing threat from Facebook Inc. and Alphabet Inc.’s Google.
Sorrell had strongly advocated keeping Kantar, which analysts say has underperformed the rest of WPP in recent years. The bidders are comfortable with Kantar’s basic business model and want to speed up its delivery of data and services and add more digital activities, its CEO Eric Salama said in an interview last month.
Read has said he’d like to keep a 25% to 40% stake and will use some of the proceeds to offset earnings dilution.
WPP also said Monday it was selling its 25% stake in sports-marketing agency Chime Communications Ltd. to majority shareholder Providence for 54.4 million pounds ($68.8 million).
Bain is working with Credit Suisse Group AG and London-based boutique advisory firm Canson Capital Partners. Goldman Sachs Group Inc. and Ardea Partners are advising WPP on the sale.
--With assistance from Joe Mayes, David Hellier, Liana Baker and Ruth David.
To contact the reporters on this story: Dinesh Nair in London at dnair5@bloomberg.net;Sarah Syed in London at ssyed35@bloomberg.net
To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Thomas Pfeiffer, Rebecca Penty
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