Advertising giant, WPP and two private equity firms, are each reported to be considering a £600 million bid for American advertising group, Grey Global.
According to
The Guardian, WPP chief executive, Sir Martin Sorrell, is expected to disregard shareholders concerns when he makes a bid for the last independent advertising network, with an offer just under the current share price.
Others expected to make a play for the group include; private equity groups, Blackstone Group and Hellman & Friedman, as well as French advertising agency, Havas – although not considered as a front-runner for the take-over.
Sir Martin has yet to confirm if he interested in Grey Global but has spent the last few weeks going over the group’s accounts. However, an industry analyst who attended a conference with the chief executive said: “The market’s assumption is that he’ll buy it and there will be equity issued (see WPP Considering £500 Million Rights To Buy Grey).”
If WPP decides to go ahead with a bid, a £500 million rights issue is expected to be issued to fund the acquisition, despite Sir Martin saying that the purchase of Grey could be easily absorbed by WPP. He added: “It doesn’t move the needle at all. Grey, in the context of WPP, is not enormous.”
According to reports, Sir Martin Sorrell has been awarded £14.1 million worth of shares that were due to him under WPP’s executive incentive scheme. According to The Independent, this will not alter the size of Sir Martin’s underlying shareholding in WPP, which stands at 17.27 million shares, worth £87 million.
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