Tempers flare as Sorrell beats WPP in battle for Dutch agency

Martin Sorrell beat WPP in the race to buy a Dutch digital agency on Tuesday, infuriating his former company and revealing the animosity raging between the two sides.

Sorrell left the world’s biggest advertising group WPP in April over a complaint of personal misconduct. Leaving without a noncompete clause, he set up a new company weeks later and took on his former firm in a bid battle for the agency MediaMonks.

Incensed, WPP had warned Sorrell that he would lose his multi-million pound share awards if he did not back off, arguing that their former CEO and founder had known about its interest in the agency before he left.

Having consulted lawyers, the world’s most famous advertising man pressed on regardless through his new vehicle, S4 Capital.

“WPP’s lawyers wrote to Sir Martin’s lawyers last week pointing out the breach of Sir Martin’s confidentiality undertakings in his approach to MediaMonks after his resignation from WPP,” a spokesman for the FTSE 100 company said.

“Despite subsequent protestations from Sir Martin’s lawyers, we are well aware of the facts and he has jeopardised his LTIP entitlement.”

Sorrell, who built WPP from a two-man operation into the world’s largest advertising group with over 200,000 staff in 112 countries, had been entitled to share awards worth up to 20 million pounds in future payments as part of a long-term incentive plan.

That is now in doubt after he agreed a 300 million euro deal to buy MediaMonks, a digital agency that employs more than 750 people in 10 countries to create content and campaigns for clients including Adidas, Amazon, Google, Netflix and Hyundai.

WPP had been interested in acquiring the firm, along with other industry rivals such as Accenture Interactive. A person familiar with WPP’s thinking said they had baulked at the price.

“S4 Capital seems to have abandoned commercial considerations in its desperate pursuit of landing the asset,” the source said.

Sorrell said the deal represented the first move by S4 Capital to create a “new era, new media solution embracing data, content and technology”.

The Briton is seen as the godfather of the advertising holding companies that have dominated the industry for decades, providing strategy, media buying, research and data analytics. (RTRS)