Former WPP boss Martin Sorrell is planning to raise up to £1 billion to fund an advertising agency takeover spree as he looks to build a rival marketing empire.
A shareholder circular sent out on Wednesday to investors in Sorrell’s new firm, S4 Capital, revealed that he wants to issue new shares to invest in acquisitions.
It comes just a day after it emerged that S4 Capital and WPP are going head to head in a battle to take over Netherlands-based MediaMonks.
The bidding war could rise as high as €300 million (£264 million) for MediaMonks, which specialises in digital advertising and production.
Details of S4’s planned fundraising will raise eyebrows, given previous indications of the investment available and Sorrell’s assurances that his new venture will not be on a scale to compete directly with WPP.
S4 has previously detailed plans for Sorrell to pump in £40 million, with support pledged from investors for up to £150 million more.
Advertising guru
The 73-year-old advertising guru has also previously dismissed competition speculation, describing his new firm as “a peanut that wouldn’t want to compete against a £20 billion global company like WPP”.
Sorrell left WPP – the FTSE 100 company he founded more than 30 years ago – in April following allegations of personal misconduct, which he denies.
WPP carried out an inquiry into claims that he misused company funds, but the details of the investigation were never disclosed.
It has been alleged that the probe looked into whether he used company cash to pay for a sex worker, claims that Sorrell has “strenuously” denied.
Compete directly
Shareholders vented their anger at WPP’s annual general meeting last month over its handling of his departure, which included a bumper £20 million payout, while failing to enforce any non-compete clause.
It means that Sorrell is able to compete directly with WPP for contracts.
As well as the Dutch firm S4 is looking to snap up, other potential takeover targets are thought to include US-listed marketing and communications agency MDC Partners. – PA
