WPP PLC (LON:WPP) has sold its minority stake in sports, entertainment and communications firm Chime for £54.4mln as part of a strategy to streamline the business.
The advertising giant is selling the holding in Chime to Providence Equity Partners, which already owns 75% of the business.
WPP said there would be the potential to receive additional payout amounts based on the future value of Chime.
READ: WPP sells majority stake in post-production firm The Farm
The company did not disclose its stake in Chime but the Sunday Times reported that it was 25%.
The group’s new chief executive Mark Read is trying to simplify the business through the sale of non-core assets in a bid to return to growth after a recent poor performance.
WPP sold post-production services house The Farm Group to US firm Picture Shop last month without disclosing the terms.
The company also wants to sell its majority stake in its data analytics firm Kantar.
Read took over from Sir Martin Sorrell, who stepped down last year following allegations of personal misconduct against him.
Liberum reiterated a ‘buy’ rating and a target price of 1,450p on WPP.
“As we highlighted in our note in May on a possible break-up of WPP, we think associates and property sales could raise a further £500mln and there is, of course, the potential sale of a majority stake in Kantar, its data / market Research business, which we estimated could raise, including leveraging up the joint venture, £2.3bn,” the broker said.
“WPP's shares have risen nearly 25% since its low point at the end of March and, at 10x consensus adjusted price-earnings, the shares remain attractively valued, whilst offering shareholders a circa 6%+ dividend yield to rate for the recovery.”
In morning trading, shares edged up 0.8% to 998.6p.