Ex-WPP Group PLC (LON:WPP) boss Martin Sorrell is making a stock market comeback just weeks after leaving the FTSE 100-listed advertising giant.
Cash shell Derriston Capital (LON:DERR) announced on Wednesday that it has reached agreement on the terms of a transaction to acquire S4 Capital Limited, a new company formed by Sorrell.
READ: WPP CEO Martin Sorrell retires after internal probe into alleged personal misconduct
S4 Capital recently completed a £51mln equity fundraising of which Sorrell contributed £40mln with the balance of the funds coming from institutional and other investors.
Derrison is to change its name to S4 capital – which it is understood refers to four generations of the Sorrell family – with Sorrell to be appointed executive chairman of the company.
In a statement, the group said it is to embark on a “new corporate strategy to build a multi-national communication services business, initially by acquisitions.”
Sorrell commented: "S4 Capital is a company that aims to build a multi-national communication services business focused on growth.
“There are significant opportunities for development in technology, data and content. I look forward to making this happen."
Sorrell, the driving force behind 33 years of dealmaking at WPP, stepped down as its CEO in April after the board investigated claims of misconduct.
Echos of 1985
The decision to acquire Derriston has echoes of his reverse takeover of a small listed firm, Wire and Plastics Products, then a manufacturer of shopping baskets in 1985.
As the transaction constitutes a reverse takeover under Listing Rules, Derrison has requested a suspension of trading in its shares which closed at 11.40p on Tuesday.
AJ Bell investment director Russ Mould commented: “With Sorrell as executive chairman and around £200m in raised and committed funds, this buy-and-build effort is likely to create plenty of noise.
“However, while WPP shares fell today, it is very premature to describe S4 as a challenger to the business, despite Sorrell’s involvement.”
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