Investors call for break-up of troubled WPP

INVESTORS are exploiting turmoil at WPP to push for a break-up of the firm’s sprawling global empire, it is claimed.

They are said to be calling for bosses to offload Kantar, its £3.5bn market research arm, and use the cash to pay down debt, launch share buybacks and focus on its core businesses.

It comes as the company has been left reeling by its worst profits since 2008, growing competition from Facebook and Google and misconduct claims against its chief executive, Sir Martin Sorrell ( pictured).

The allegations Sorrell misused company funds – which he denies – have also reignited debate about who could succeed him after 32 years at the top. But doubts are being raised about whether the 73-year-old can continue, even if he is exonerated. ‘The company feels as if it’s lost its way a bit, and that it’s not fit for the modern era. Increasingly, he looks like a man from the past,’ one of WPP’s largest shareholders reportedly said. Analysts have also said a weakening of Sorrell’s authority makes a break-up of the firm more likely. Last year he presided over an extraordinary buying spree, with WPP hoovering up 43 companies. WPP now employs more than 200,000 staff across 3,000 offices in 112 countries. One possible buyer for Kantar could be rival consumer data giant Nielsen, according to Liberum.

They noted Sorrell believed the business gave WPP ‘a unique advantage’ over competitors, but added: ‘There have been persistent questions from the market as to whether WPP should exit the business, given its perennial underperformance. We are not sure that whoever succeeds Sir Martin would be as a firm supporter of retaining ownership.’

A source close to WPP last night rejected that analysis. ‘ There are benefits that it brings to the wider business which, if it is looked at in isolation, do not necessarily come across,’ the source said. ‘When it’s combined with media buying it has proved quite a powerful combination.’