WPP WPP PLC

By Ben Dummett and Nick Kostov 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 2, 2019).

LONDON -- Advertising giant WPP PLC said it has entered into exclusive talks to sell a majority stake in its Kantar Group market-research unit to private-equity firm Bain Capital LP in a deal that values the business at about $4 billion, including debt.

The sale would mark the biggest move yet by Chief Executive Mark Read in his effort to revive WPP's fortunes since taking over the top job last year in the wake of the abrupt departure of the company's longtime leader and founder Martin Sorrell.

Burdened by a slumping share price, Mr. Read has focused on cutting London-based WPP's exposure to businesses that don't fit with a plan to establish a network of more nimble and tech-savvy ad agencies that can better cope with the upheaval in advertising and media.

WPP said Monday that there is "no certainty that these discussions will result in a transaction involving Kantar." WPP didn't disclose how much of Kantar it was discussing selling to Bain. On Monday, WPP also announced that it has sold its minority stake in communications and sports-marketing group Chime Group Holdings for $69 million.

Kantar offers research, data, social-media moderating and other services aimed at helping companies tailor their brands, advertising campaigns and products to reach their target market. The data provider has weighed on WPP's results for a number of years, as clients have turned to less labor-intensive digital sources for customer insights.

That challenge makes Bain's possible acquisition a risky bet. Still, the buyout firm will have the advantage of trying to spearhead a turnaround out of the glare of public markets. At the same time, WPP stands to reap some benefit if Bain's efforts succeed -- by maintaining a minority stake.

Bain emerged as the winning bidder from a group of rival buyout firms, including Vista Equity Partners, Platinum Equity LLC and Apollo Global Management LLC. The buying interest underscores private-equity investors' healthy appetite for unloved businesses carved out of larger companies. These deals allow private-equity firms to deploy their record amounts of cash quickly, while trying to find turnaround opportunities to generate outsized returns.

Write to Ben Dummett at ben.dummett@wsj.com and Nick Kostov at Nick.Kostov@wsj.com

(END) Dow Jones Newswires

July 02, 2019 02:47 ET (06:47 GMT)

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