The war of words between holding group WPP and ADK has heated up as the agency attempts to leave the holding company’s umbrella. The holding group, owned by ad industry titan Sir Martin Sorrell, holds 25% of ADK’s share at an estimated value of $US290 million, according to media reports.
Bain Capital, based in Boston, has offered US$1.35 billion for ADK.
After more than a week of hostilities between the parties via the media, ADK confirmed in a new statement reported by Mumbrella Asia that the agency will seek to sell the holding group’s shares to Bain Capital “regardless of any objections” WPP has to the deal.
ADK also claimed that given the huge changes in the advertising industry in recent years, a business partnership with WPP “simply no longer makes sense”, and that “expected synergies never materialized” during their 20 year relationship.
WPP had previously contested the grounds of Bain Capital’s offer, accusing ADK of “improperly attempt[ing] to terminate its co-operation and business alliance agreement with WPP”. The holding group also suggested that Bain Capital’s offer “significantly undervalued” the agency.
In a shot across the bow of ADK’s management, WPP also asserted that ADK has “consistently resisted opportunities to improve the performance of its overseas operations and exploration of significant digital opportunities” and invested in “disastrous acquisitions and consolidations”.
ADK also holds a 2.4 percent stake in WPP which is worth around US$576 million. The agency has indicated it would like to sell its share in WPP as well.
Sourced from Mumbrella