Adland’s tectonic plates hafve indeed been shifting (finally) this year with the mega-merger of Omnicom and Interpublic, generational changes at WPP and Dentsu putting a for sale (or a deal) sign on its international business.
Sir Martin Sorrell’s S4 Capital remains a pretty big player: H1 revenues of £328m in 2025, £908m billings and 6879 employees scattered across the globe.
Trouble is revenue is down nearly 13% on the same period a year ago. Pre-tax losses have widened to £25.1 million for the half year from £17.1 million previously.
S4, which once approached a dizzy valuation of £4bn, is now a worth mere £119m as its shares have more than halved in a year. It’s now worth far less than recovering M+C Saatchi. Surely a buyer will put shareholders out of their misery? £119m (plus a buyout premium) isn’t that much for all those billings. It also has some pretty good clients, albeit not spending nearly as much as SMS hoped.
The reason it’s still standing independently is that Sorrell, the founder of WPP, has, in effect, a golden share and such a deal can’t be done without his say-so. And he hardly needs the money. The reason an attractive bid hasn’t emerged is, perhaps, that S4’s model – and by far its biggest component Monks – is based on serving big tech clients and they, currently, have other things on their mind, like AI. AI is costing the the likes of Amazon, Google, Meta and Microsoft billions – with no guaranteed return.
And anyone who (like Sorrell perhaps) expects tech giants to carry on behaving in the future as they have in the past (spending heavily on marketing via external agencies) is an incorrigible optimist.
Sorrell may be right to dig his heels in: the global economy may recover, Big Tech may come to the conclusion there’s more to the world than AI. Stagwell has already had a tentative run at S4, offering around $700m although it’s hardly the most weatherproof of partners. S4 said the much smaller MSQ was interested in a deal but MSQ said it wasn’t.
But sooner or later a deal with someone will be agreed, maybe even with a revived S4 in the driving seat. It’s become a game of brinkmanship and it may be unwise to bet against Sorrell in such an game.
