WPP to sell £1bn ‘treasure trove’ now Sorrell’s left
WPP’s bosses have paved the way for a multi-billion pound sale of parts of the business – but insisted the vast advertising empire will not be broken up.
Chairman Roberto Quarta moved to quash talk that a major shakeup was on the cards as rumours swirled that the firm was poised to sell market research arm Kantar.
The Italian, 68, said the group would keep an open mind following the sudden departure of boss sir Martin sorrell but stressed: ‘This is not the break-up.’
But WPP is prepared to sell stakes it holds in a range of companies, including media organisation Vice, online ad- selling firm Appnexus and audience measurement company Comscore. It could also sell stakes in advertising group Chime and Nasdaq-listed software firm Globant. These are among what analysts have described as a ‘treasure trove’ of holdings estimated to be worth more than £1bn.
Quarta’s comments came as WPP posted its first results for more than 30 years without sorrell at the helm. Like-for-like revenues fell 0.1pc – underlining the pressure on the advertising giant. But this was not as bad as feared and shares rose almost 10pc at one point – their biggest gain for nearly a decade. shares eventually closed up 8.6pc, or 99p, at 1247.5p and are now back above where they were when sorrell, 73, stood down on April 14.
sorrell’s shock departure, which followed a probe into alleged misconduct, has reignited speculation the group could seek to offload large parts of the sprawling business he built up.
Analysts have suggested Kantar, thought to be worth £4bn, is an ideal candidate. Reports over the weekend said private equity firm CVC Capital Partners had expressed an interest but yesterday WPP executives declined to comment on it specifically.
However, Quarta told analysts: ‘Whilst we will be keeping an open mind, and we will always go where value is for shareholders, the starting point is, definitely, this is not the break-up. It is far too early to speculate about asset sales. But there will definitely be an increase in pace of change and not a slowby down or a pause on strategy.’
Andrew scott, brought in to run the business with Mark Read until sorrell’s replacement is chosen, said WPP would sell minority stakes in businesses it owns.
This would also help reduce debts, another key aim stated by scott and Read. The pair said they were reviewing WPP’s structure for the board but there was no fixed timetable.