WPP is planning to announce the sale of a majority stake in its Kantar market-research business to Bain Capital within days, sources said.
Bain has been discussing the purchase of a 60 per cent stake, and the parties are finalising terms of an agreement. An announcement could be made in the next two days, but could also be postponed, the sources said.
Representatives for WPP and Bain declined to comment.
The private equity firm entered into exclusive talks for the business last week after beating out rival buyout companies. The talks valued Kantar at about $4 billion, WPP said at the time.
The sale is part of WPP chief executive Mark Read’s push to cut debt and simplify the global ad agency network after ditching his predecessor’s acquisition-fueled growth strategy. Mr Read has said previously he’d like to keep a 25 per cent to 40 per cent stake in Kantar and will use some of the proceeds to offset earnings dilution.
Shift to digital
WPP shares were down 0.3 per cent in afternoon trade in London. The stock is up 16 per cent so far this year.
The advertising industry is grappling with a shift to digital ads, which are set to make up the majority of ad spending for the first time this year and are displacing more traditional media, according to research from Magna Global. Deals for advertising companies are up about 21 per cent in the past 12 months from the year earlier, with bidders spending about $16.5 billion, according to data compiled by Bloomberg. – Bloomberg
