WPP goes head-to-head with former boss Sir Martin Sorrell in bidding war for Dutch digital agency MediaMonks
WPP is locked in a bidding war with former chief exec Sir Martin Sorrell's new venture S4 Capital to take over Dutch digital agency MediaMonks.
Reports on Monday suggested Sorrell's new vehicle S4 Capital was in talks to acquire the company, which has around 600 staff.
But it emerged today that WPP made an offer for MediaMonks on Friday, putting it in direct competition with Sorrell in the reported €300m (£265m) auction.
Sky News said the auction was being overseen by Clarity Corporate Finance, and also involves Accenture and private equity firm Inflexion.
A spokesperson for WPP declined to comment.
The news comes weeks after Sorrell said he was not interested in competing with the company he set up and led for over 30 years.
Speaking at Cannes last month, he described S4 Capital as a "peanut".
"Although it does occur to me that some people have peanut allergies," he added.
Today's news may raise questions about WPP's decision to not make Sorrell sign a non-compete clause preventing him from being involved in any rival marketing ventures.
Sorrell abruptly exited WPP in April after it emerged the company was investigating him over allegations about his "personal misconduct".
Though the results of WPP's internal probe were never publicly disclosed, a report in the Wall Street Journal claimed Sorrell was being investigated for using company funds to pay for a prostitute – an allegation he "strenuously denies".
Just weeks after his resignation, Sorrell announced his return to the market as he formed marketing services group S4 Capital from shell company Derriston Capital.
Recent reports suggest Sorrell has raised around £100m from City investors for the new venture to expand through acquisitions. The ad guru has also stumped up £40m of his own money for the business.
Over 33 years, Sorrell built WPP from a wire shopping baskets manufacturer into the world's biggest marketing company, and it's likely he'll use the same strategy of buying up smaller agencies to expand S4 Capital.
WPP faced criticism from investors at its annual meeting last month for letting Sorrell establish a rival business while keeping up to £19m in uninvested shares in the company.
The board batted off a shareholder revolt as nearly 30 per cent of investors voiced concern over Sorrell's £20m exit pay package.
Chairman Roberto Quarta is looking for a chief executive to replace Sorrell. Head of WPP agency Wunderman Mark Read is a possible contender, alongside WPP chief operating officer Andrew Scott.
MediaMonks said it was "flattered" to be mentioned in this context, but did not comment on the story. A representative for Sorrell declined to comment.