WPP tipped to launch £600m bid for Grey Global Group
By Staff,, brandrepublic.com, Friday, 03 September 2004 09:00AM
LONDON - WPP Group is being tipped to make a bid in the region of £600m for Grey Global Group next week alongside two private equity houses, which are also set to bid for the third largest US advertising network.
The Guardian reported this morning that WPP chief executive Sir Martin Sorrell will dismiss shareholder concern about a possible bidding war and make a play for Grey, which will make it the world's number one advertising business.
The £600m price tag is much lower than commentators have originally mentioned, with early valuations placing a price tag on Grey of around £700m.
Investors are concerned that WPP might end up in a bidding war with private equity groups, which are also interested in taking over Grey.
Among the groups identified are Providence Equity Partners and a joint bid from Hellman & Friedman and Kolhberg Kravis Roberts & Co.
The Blackstone Group has also been mentioned, but it is believed to have dropped out on issues of price.
There is still a question mark over a potential bid from French ad group Havas, after an initial flurry of activity that saw it talk to financial partners including Quadrangle and Blackstone.
Although Havas chief executive Alain de Pouzilhac says it can afford a bid, it is under pressure from investors not to make an offer. Financier Vincent Bollore recently raised his stake in Havas from 5.1% to 8% and is believed to be against a bid.
In the past few weeks, WPP has been looking over Grey's books and Sir Martin recently hit back at Morgan Stanley, which said it believed the acquisition of Grey would not help WPP achieve its long-term goals.
"It doesn't move the needle at all. Grey, in the context of WPP, is not enormous," Sir Martin said recently.
If WPP does launch a bid, it is expected to hold a £500m rights issue to fund the acquisition.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.
This article was first published on brandrepublic.com
- Senior Marketing Manager Cutis Developments £50,000 - £60,000 per annum , Victoria, London (Greater)
- Head of Marketing Stopgap £40000 - £55000 per annum, London
- Digital Design Director Network Career Consultants £55000 - £65000 per annum, London
- Database Marketing Analyst JV Recruitment £35000 - £45000 per annum, Benefits: Benefits, Greater Manchester
- Business Development Director Major Players £65000 - £80000 per annum + excellent bonus and benefits, London
- Coco de Mer launches X-rated ad with Rankin and TBWA
- Campaign Viral Chart: Huggies 3D-printed ultrascan makes top spot
- Fallon introduces stuffed duck to launch Cadbury Puddles
- Betfair to call £15m European media review
- Dave Bedwood to leave M&C Saatchi
- Wonga rebrands as 'transparent and responsible' lender after hiring Fold7