WPP retreats in battle with Bain for ADK

WPP appears to have folded in the poker game for Japanese agency ADK according to a Reuters report from Tokyo.

Reuters says it’s seen a draft statement from Bain Capital saying that WPP – which owns 25 per cent of ADK – had agreed to its $1.35 billion tender offer, which it has hitherto opposed. WPP, which said that price was too low and ADK had no right to end its partnership in this way, had planned to take the dispute to arbitration.

Neither side has made an official statement.

The obvious conclusion to draw is that WPP and other shareholders who also felt the price was too low have calculated that they will lose in a tight contest.

WPP shareholders may also have felt the fight was a distraction at a time when the marcoms behemoth was battling low or non-existent growth along with its holding company rivals.

Giving way in such a contest seems out of character for WPP boss Sir Martin Sorrell who usually sees these legal fights through to the end.

Update

It seems that peace has broken out between Bain and WPP, according to this statement from Bain.

WPP has agreed to tender its shares to Bain Capital at the offer price of 3,660 JPY per share. Furthermore, WPP has indicated that, if the tender offer succeeds and is settled, it will withdraw the arbitration and injunction proceedings brought against ADK on November 1, 2017, and the alliance between WPP and ADK will be terminated with immediate effect.

In the event that Bain Capital is able to take ADK private, Bain Capital will discuss with WPP a potential investment by WPP as a non-controlling minority shareholder in a Bain Capital investment vehicle that directly or indirectly owns the interests of ADK. Any future cooperation will be discussed in good faith by both parties.

David Gross-Loh, Managing Director at Bain Capital Private Equity, said: “We are very pleased that WPP has shown its support for the privatization of ADK, and an orderly termination of the current alliance which exists between ADK and WPP upon the success of our offer. We now hope ADK’s other shareholders will recognize the attractive valuation and liquidity opportunity presented in our fair and fully priced offer, and tender their shares.”

Such a deal would leave WPP with a stake in the huge Japanese ad market.

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