Benatti Bids to Buy Out WPP from Italian Joint Venture

02 February 2006

If Bernardo dei Machiavelli had ever scripted a soap opera, this would have been it!

Following WPP Group's sacking of Marco Benatti, its former 'country manager' for Italy [WAMN: 18-Jan-06], and the subsequent instigation of a fraud enquiry into events at WPP Italia, the plot has taken another intriguing twist.

Benatti has launched a bid to take control of Fullsix, an Italian marketing services company in which WPP has a 26% stake. On Monday, the Italian upped his 34.94% holding in the firm to 41%, a level which under Italian law triggers a mandatory offer.

The move raises the piquant possibility of Benatti and Sorrell - or more likely their respective financial henchmen - facing each other across the negotiating table while elsewhere their legal henchmen swap writs.

The nub of the allegations is that Benatti collected an introductory commission of £140,000 ($249.5k; €205.2k) from WPP following its acquisition of Italian media agency Mediaclub three years ago [WAMN: 31-Jan-06]. WPP now alleges that Benatti had a financial interest in the company - a fact of which it claims it was unaware at the time.

On Tuesday, Benatti went public on the fraud allegations, accusing Sir Martin of "brutal and unjustified behaviour [that has] destroyed in a mere twenty-one days the leadership position" of WPP in Italy.

His accusation drew a measured response from WPP: "The facts will speak for themselves. No replacement has been made for Mr Benatti, although Paul Richardson, WPP's group financial director and a member of the board of WPP Italia, has been appointed acting country manager.

"Mr Benatti appointed the chief operating officer of WPP Italy himself, some six years ago. The suggestion that these matters concern style and management philosophy are an attempt to divert attention from the facts."

Data sourced from Financial Times Online; additional content by WARC staff