Latest news with #SirMartinSorrell
Yahoo
2 days ago
- Business
- Yahoo
Ad agency denies claims it held takeover talks with Martin Sorrell rival
A London-based advertising agency has denied holding any takeover talks with Sir Martin Sorrell and insisted it has no interest in a deal. MSQ Partners said it was 'surprised' by a recent announcement from Sir Martin's S4 Capital following a report by Sky News that claimed it had received an approach about a possible merger. S4 said discussions were at a 'very preliminary stage', but insisted any deal would be structured as a takeover of MSQ by S4. In an update to the stock exchange, MSQ said its board of directors had not been in any talks or considered any proposals. The ad firm – which counts Diageo, Unilever and Vodafone among its clients – acknowledged that informal conversations may have taken place between its largest shareholder One Equity Partners (OEP) and S4. But it said: 'For the avoidance of doubt, neither OEP nor MSQ intend to pursue further discussions regarding the rumoured transaction.' The company added: 'MSQ remains focused on and confident in its primarily organic growth strategy, which has delivered consistent revenue and ebitda [earnings before interest, taxes, depreciation and amortisation] growth over a 15-year period and two of the most successful private equity exits in the marcomms [marketing communications] sector over recent years.' The knock-back will deal an embarrassing blow to Sir Martin, who is looking to revive his struggling ad firm. The 80-year-old tycoon oversaw a period of rapid growth at S4, which he founded following his acrimonious departure from WPP. But the digital ad company has been buffeted by wider economic malaise as brands cut back spending. Its exposure to major tech clients such as Google and Amazon has left it particularly vulnerable to the slowdown. S4 has also been hit by accounting blunders that forced it to delay its financial results twice, while it has issued a string of profit warnings in recent years after failing to meet its own lofty revenue targets. Shares in the London-listed company have collapsed by more than 90pc with its market value now standing at roughly £135m, down from a peak of £5bn in 2021. S4 has embarked on a heavy programme of cost-cutting, including slashing hundreds of roles. The company posted a loss of £307m last year after taking a £280m write-down owing to tough trading conditions. Its struggles come amid deep-seated challenges for traditional advertising companies as tech rivals gain a stranglehold over the online market and as artificial intelligence (AI) threatens to upend their business models. This has fuelled speculation of a wave of consolidation across the industry. Omnicom and Interpublic have agreed a $30bn (£22bn) merger that will create the world's largest advertising agency, while WPP has been linked to a potential tie-up with Accenture. S4 Capital was contacted for comment. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Telegraph
5 days ago
- Business
- Telegraph
Sorrell attempts to revive struggling ad firm with merger talks
Sir Martin Sorrell is vying to revive his struggling advertising agency by exploring a potential takeover of a rival group. S4 Capital, which was founded by Sir Martin in 2018, confirmed it has received an approach from MSQ Partners about a possible merger. The company said any deal would be structured as an acquisition of MSQ Partners by S4 Capital, but warned discussions were at a 'very preliminary stage' and there was no certainty an agreement would be reached. Shares in S4 Capital jumped as much as 10pc on announcement of the talks. MSQ Partners, which is majority-owned by US private equity firm One Equity Partners, was contacted for comment. The discussions will raise questions over the future of Sir Martin, who founded S4 Capital following his acrimonious departure from WPP. He grew the company rapidly in its first few years through a slew of acquisitions. But the ad firm, which counts Amazon and Google among its clients, has been hit by a slowdown in advertising spend and accounting blunders that forced it to delay its financial results twice. S4 has also issued a string of profit warnings in recent years after falling short on optimistic revenue forecasts. Shares have collapsed more than 90pc in the last five years with the company's market value now below £140m, down from a peak of around £5bn in 2021. The ad firm has rolled out heavy cost-cutting measures, slashing hundreds of roles and cutting discretionary spending, but still posted a loss of £307m last year after taking a £280m write-down owing to tough trading conditions. London-based MSQ Partners, which was founded in 2011, employs more than 1,850 people worldwide and counts Diageo, Unilever and Vodafone among its clients. It is not the first time S4 Partners has been linked to a potential merger. The ad firm last year received a takeover offer from US marketing group Stagwell but Sir Martin rebuffed the offer, the Wall Street Journal reported at the time. It comes amid an accelerating trend of consolidation across the advertising industry as traditional agencies grapple with the dominance of tech giants and the rapid growth of artificial intelligence (AI). Omnicom and Interpublic are gearing up for a merger that will create the world's largest advertising company, worth $30bn (£22bn). WPP, which was overtaken by French rival Publicis last year, has also been linked to a potential tie-up with Accenture. WPP, which has appointed former Microsoft executive Cindy Rose to replace Mark Read as its chief executive from next month, has itself wielded the axe on 7,000 jobs over the last year in an effort to slim down its business and cut costs.
Yahoo
09-07-2025
- Business
- Yahoo
WPP warns of lower profits as clients slash ad spend in "deteriorating" market
Global advertising and marketing agency WPP today issued a bleak profit warning as it revealed trading conditions have continued to worsen through the Spring and into the summer. The Waterloo headquartered giant reinvented as an ad company by Sir Martin Sorrell in 1985 said it had seen a 'deterioration in performance' during the second quarter of the year against a 'challenging economic backdrop.' The update triggered another sell off in WPP shares, which fell more than 12%, or 65.2p to a 16 year low of 662.4p. The shares are down more than 40% this year. It is also likely to send shivers through a struggling sector battling the twin challenges of declining spend during uncertain times and the rise of AI. WPP said it now expected first half revenues to fall by 4.2% to 4.5% with a steeper 'below expectations' decline of 5.5% to 6% in the second quarter. As a result first half operating profits will be in the range of £400 million to £425 million which is consistent with a year on year margin decline of 280 to 330 basis points. With no sign of 'macro uncertainty' easing client spend and net new business is expected to be weaker than previously anticipated in the second half of the year. Revenue over the year as a whole is expected to fall by 3% to 5% with the operating profit margin down by 50 to 175 basis points after cost cutting. CEO Mark Read, who leaves WPP at the end of the year after seven years in the job and 30 years with the company said: "Since the start of the year, we have faced a challenging trading environment with macro pressures intensifying and lower net new business. 'While we expected the second quarter to be similar to the first quarter, performance in June was worse than anticipated and we expect this pattern of trading in the first half to continue into the second half. "As a result, we are updating our guidance for the full year and reducing our expectations on LFL revenue less pass-through costs growth to -3% to -5% (from flat to -2%) with a year-on-year decline in headline operating profit margin of 50 to 175 bps (vs. around flat previously). "Our focus remains on ensuring the right balance between investing in the business for the long-term and continuing to reduce structural costs, while taking appropriate actions to respond to the current trading environment."
Yahoo
10-06-2025
- Business
- Yahoo
Boss of London ad champion quits after losing crown to French rival
The boss of WPP is to step down months after the British advertising behemoth lost its crown to a French rival. Mark Read will leave after more than three decades at WPP, including seven years as chief executive. He will continue in the role until the end of the year while the board searches for his successor. Mr Read's departure, though long-expected in the industry, comes at a turbulent time for WPP. The London-based group, which employs around 110,000 people worldwide, last year lost its title as the world's largest ad company by revenues to French rival Publicis. Meanwhile, its two other largest rivals – Omnicom and Interpublic – have agreed to merge in a $30bn (£22bn) deal that will further erode WPP's dominance. The British company is also grappling with industry-wide turmoil sparked by the rise of artificial intelligence (AI), which threatens to upend the work of ad agencies. This has compounded the challenge posed by tech giant such as Google and Meta, which have grown their share of the advertising market in a direct threat to traditional holding groups. Mr Read's tenure has been dominated by efforts to simplify WPP, which had ballooned into a sprawling network of companies under his predecessor Sir Martin Sorrell, who left the company he founded following allegations of misconduct, which he has always denied. As chief executive, Mr Read oversaw the merging of a number of agencies while selling off some non-core businesses, including the £2.5bn sale of a 60pc stake in market research group Kantar. More recently, the ad boss has also vowed to invest heavily in AI, pumping £300m into the technology this year and investing in generative AI startup Stability AI. However, WPP's growth has ground to a halt in recent years and the company's share price has more than halved during Mr Read's tenure, pushing its market value below £6bn. Shares fell a further 2pc after his departure was announced. Alex DeGroote, a media analyst, said: 'The company is much simpler today than it was when he came on board as chief executive.' But he added: 'There's just a feeling of the company having lost a lot of ground to the likes of Publicis, so I can't honestly say that he will be remembered as having delivered immense shareholder value.' Mr Read's future has been in doubt since Philip Jansen, the former BT boss, was appointed as WPP chairman at the beginning of the year. Mr Jansen said Mr Read had 'played a central role in transforming the company into a world leader in modern marketing services'. Mr Read said: 'After seven years in the role, and with the foundations in place for WPP's continued success, I feel it is the right time to hand over the leadership of this amazing company. 'I am excited to explore the next chapter in my life and can only thank all the brilliant people I have been lucky enough to work with over the last 30 years, and who have made possible the enormous progress we have achieved together.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Telegraph
09-06-2025
- Business
- Telegraph
Boss of London ad champion quits after losing crown to French rival
The boss of WPP is to step down months after the British advertising behemoth lost its crown to a French rival. Mark Read will leave after more than three decades at WPP, including seven years as chief executive. He will continue in the role until the end of the year while the board searches for his successor. Mr Read's departure, though long-expected in the industry, comes at a turbulent time for WPP. The London-based group, which employs around 110,000 people worldwide, last year lost its title as the world's largest ad company by revenues to French rival Publicis. Meanwhile, its two other largest rivals – Omnicom and Interpublic – have agreed to merge in a $30bn (£22bn) deal that will further erode WPP's dominance. The British company is also grappling with industry-wide turmoil sparked by the rise of artificial intelligence (AI), which threatens to upend the work of ad agencies. This has compounded the challenge posed by tech giant such as Google and Meta, which have grown their share of the advertising market in a direct threat to traditional holding groups. Mr Read's tenure has been dominated by efforts to simplify WPP, which had ballooned into a sprawling network of companies under his predecessor Sir Martin Sorrell, who left the company he founded following allegations of misconduct, which he has always denied. As chief executive, Mr Read oversaw the merging of a number of agencies while selling off some non-core businesses, including the £2.5bn sale of a 60pc stake in market research group Kantar. More recently, the ad boss has also vowed to invest heavily in AI, pumping £300m into the technology this year and investing in generative AI startup Stability AI. Declining shareholder value However, WPP's growth has ground to a halt in recent years and the company's share price has more than halved during Mr Read's tenure, pushing its market value below £6bn. Shares fell a further 2pc after his departure was announced. Alex DeGroote, a media analyst, said: 'The company is much simpler today than it was when he came on board as chief executive.' But he added: 'There's just a feeling of the company having lost a lot of ground to the likes of Publicis, so I can't honestly say that he will be remembered as having delivered immense shareholder value.' Mr Read's future has been in doubt since Philip Jansen, the former BT boss, was appointed as WPP chairman at the beginning of the year. Mr Jansen said Mr Read had 'played a central role in transforming the company into a world leader in modern marketing services'. Mr Read said: 'After seven years in the role, and with the foundations in place for WPP's continued success, I feel it is the right time to hand over the leadership of this amazing company. 'I am excited to explore the next chapter in my life and can only thank all the brilliant people I have been lucky enough to work with over the last 30 years, and who have made possible the enormous progress we have achieved together.'
