WPP in Talks with Alibaba, Tencent to Sell Stake in Chinese Unit
July 21 2018 - 12:29PM
Dow Jones News
By Nick Kostov
WPP PLC has held talks to sell a minority stake in its
operations in China, according to a person familiar with the
matter, as the world's largest advertising company reviews its
business after the exit of its founder Martin Sorrell.
Although the talks are at an early stage, WPP is looking to
secure investment from Chinese tech giants Tencent Holdings Ltd.
and Alibaba Group Holding Ltd, according to the person with
knowledge of the talks.
Executive Chairman Roberto Quarta and Co-Chief Operating Officer
Andrew Scott recently traveled to China to advance the deal, the
person said.
WPP's operations in China generated revenues of $1.4 billion and
employed 13,000 people last year, according to the company's annual
report.
The advertising group is undergoing a strategic business review
and has signaled that asset disposals, or selling down stakes in
certain businesses, were options as it looks to simplify its
sprawling operations and reduce its debt-to-earnings ratio.
The company is also looking for a successor to Mr. Sorrell, who
resigned as chief executive in April after The Wall Street Journal
reported that the company's board was looking into an allegation of
improper personal behavior and whether Mr. Sorrell had misused
company assets. Mr. Sorrell rejected the allegation "unreservedly"
at that time.
A potential deal to sell a minority stake in WPP's operations in
China originated before Mr. Sorrell left the company, according to
the person familiar with the matter. The talks were reported
earlier Saturday by Sky News.
The move by WPP comes after Mr. Sorrell's new marketing venture
beat it to the acquisition of MediaMonks, a Netherlands-based
digital production agency. Financial terms weren't disclosed, but
people familiar with the matter said Mr. Sorrell's new venture,
which he plans to call S4 Capital, will pay around EUR300 million
($352 million) for MediaMonks in cash and shares.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
July 21, 2018 12:14 ET (16:14 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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