As we thought, Sir Martin Sorrell’s bid for MediaMonks with his new venture S4 has aroused the ire of WPP, which is also bidding for the Dutch digital production company, valued at £250m plus.
WPP has sent a legal letter to Sorrell (below), threatening to prevent its founder and former chief executive collecting up to £20m in future payouts if he pursues a takeover bid for the company.
While Sorrell did not have a non-compete arrangement with WPP, the company he founded more than 30 years ago, WPP’s lawyers say he is “likely to be in breach of his confidentiality obligations” if he succeeds in a such a bid. The issue, presumably, being that MediaMonks was on WPP’s radar before Sorrell’s departure.
The problem for Sorrell is that just about any communications company of note is likely to have been on WPP’s radar at some stage as, for decades, it was by far the busiest acquirer of such companies. Indeed Sorrell’s dealmaking built WPP.
“Confidentiality obligations” could mean anything of course, and lots of lawyers are doubtless licking their lips at the prospect of exploring this in court. Sorrell has never been frightened of a legal joust, indeed he seems to relish them, so it’s unlikely that he’ll retreat from MediaMonks because of WPP’s action.
But £20m in payouts is…
L’affaire Sorrell is turning into a very high stakes game of poker.