S4 Capital has confirmed deal talks are underway following rumours that it is making a play for a US advertising firm.
Sir Martin Sorrell’s new venture told investors this morning that “it is in discussions with the owners of several digital marketing services businesses about a possible acquisition”.
Media reports suggest that S4 is close to reaching a deal for Mightyhive that could value the US firm at up to $200m (£154m).
“The possible transaction, if consummated, would be in line with the company's stated strategy of creating a new era, new media solution embracing data, content and technology in an always-on environment for global, multi-national, regional and local clients and for millennial-driven digital brands,” S4’s board said in an update.
It would be Sir Martin’s second acquisition since leaving his former business, WPP, over misconduct allegations that he denies.
WPP lost out to S4 in a battle to buy Media Monks, a Dutch agency, in July.
Media Monks specialises in a range of digital advertising services, and has worked with clients including Heineken, Lego and Audi.
Shares slumped by 16 per cent at WPP last month after sales fell in its latest quarter under new boss Mark Read.
Read said: “Our industry is facing structural change, not structural decline, but in the past we have been too slow to adapt, become too complicated and have under-invested in core parts of our business.
“There is much to do and we have taken a number of critical actions to address these legacy issues and improve our performance.”