Shares in S4 Capital PLC (LSE:SFOR, OTC:SCPPF) jumped 10% after the media company confirmed preliminary talks to acquire marketing firm MSQ Partners.
The potential deal, if it proceeds, would see S4, founded by advertising veteran Sir Martin Sorrell, combine with MSQ, which is partially owned by US private equity group One Equity Partners.
S4 emphasised that discussions remain early and there is no guarantee a transaction will occur.
Initial reports of interest in MSQ emerged over the weekend, with speculation around a possible merger.
S4 has faced challenges since 2022, including profit warnings linked to reduced technology client spending amid a shift towards artificial intelligence investments, alongside pressure from rising interest rates and tougher market conditions.
Since peaking in September 2021, S4’s shares have fallen by more than 97%.
In early trading, the stock was up 2.12p at 23.32p, valuing the business at £145 million.