WPP Shareholders Expecting Large Windfall

Wed, 17th Jul 2019

WPP has announced plans to sell its stake in data subsidiary Kantar to a private equity firm in the US. If the deal goes through, then shareholders can expect a collective windfall of £1 billion, as the company has promised to return a significant portion of the proceeds to its investors. Kantar has more than 30,000 employees, and operates in 100 countries.

The deal is worth £2.5 billion, and WPP will be putting a large amount of cash towards reducing its debts, with the remainder going to investors. The private equity firm Bain Capital will become a majority owner of Kantar, holding about 60% of the shares in the business.

WPP chief Mark Read said that the transaction will simplify the company, and create value for shareholders, giving the company a stronger balance sheet, and being a major step forward in the transformation of WPP.

This is the latest disposal embarked upon by WPP, and comes less than two weeks after the company announced that it was selling its stake in Chime, an sports marketing brand. They have also offloaded their stake in the post-production company The Farm, best known for its work on Downton Abbey.

Founder Sir Martin Sorrell parted ways with the company in 2018, and since then the new management at WPP has been working to sell of non-core operations with the goal of simplifying the brand and paying off debts.

The news of the latest disposal boosted shares in WPP by 0.5 percent, up to 5.1p

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