WPP puts its foot down over Sorrell’s MediaMonks bid

Sir Martin Sorrell is back in the news this week; his new venture – S4 Capital – has reportedly put in its first acquisition bid for digital production company MediaMonks.

However, the bid puts S4 Capital in direct competition with Sorrell’s former company, WPP, which is also looking to acquire the Netherlands-based firm.

As reported in The Times, WPP is now putting its foot down. The company’s lawyers have written to Sorrell to warn him that winning the MediaMonks bid may put him in breach of contract, costing him his £20 million “good leaver” bonus.

WPP has reportedly been interested in MediaMonks for several months and has had access to financial information not in the public domain. If Sorrell has used information learned while running the company, he will be in breach of the confidentiality clause in his WPP contract.

The news marks the first major instance of business hostility between WPP and its former chief executive. WPP had previously maintained positive relations with Sorrell, whose exit from the firm was surrounded by rumours of personal misconduct, bullying and prostitutes. The situation is muddied further as Sorrell still owns 1.6m shares in WPP.

Sorrell upset WPP shareholders by announcing a lightning-fast comeback with S4 Capital just six weeks after departing WPP – though he assured WPP chairman Roberto Quarta that the venture would be a mere “peanut”, and no threat to the world’s largest advertising and marketing group.

According to The Times, Sorrell’s spokesman has described WPP’s warning letter as “bollocks”, and made clear that the man who built WPP will not be giving up his bonus without a fight.

MediaMonks is valued at approximately €300m, with other companies bidding for it including the consultancy Accenture.