WPP in exclusive talks to sell Kantar stake to Bain Capital

WPP has been streamlining the business as part of a turnaround plan under new boss Mark Read

WPP said there was “no certainty” that the talks would result in a deal

WPP PLC (LON:WPP) is in exclusive talks to sell its majority stake in analytics firm Kantar to private equity firm Bain Capital in a deal that is expected to value the business at US$4bn.

The ad giant’s board approved a plan to sell the holding in Kantar in October and has attracted interest from private equity firms including Platinum Equity, Vista Equity and Apollo Global Management.

READ: WPP sells stake in Chime for £54mln as it seeks to streamline business

WPP confirmed after the market closed on Monday that it was in discussions with Bain, adding that there was “no certainty” that it would result in a deal.

Analysts at Liberum repeated a 'buy' rating on the stock and a target price of 1,450p, saying the news of the talks was postive for WPP.

"The price looks in line with expectations, the naming of a specific suitor and that the company is in exclusive talks should give confidence in the transaction's completion and the closing of the deal will allow WPP to significantly reduce its debt - we think total cash proceeds from a 60% stake sale would be circa £2.3bn vs £2bn implied by the valuation, because WPP would look to lever up the new entity and have cash returned to the shareholders via a special dividend as Pearson and Bertelsmann did when they merged their consumer publishing operations," they said.

The company has been trying to revive its fortunes after a series of profit warnings and a knock to its reputation following the departure of founder Martin Sorrell over allegations of misconduct, which he denied.

Mark Read, who replaced Sorrell as chief executive last year, launched a plan to turn around the business in December. His strategy includes selling non-core assets, hiring more creative staff and responding to the shift towards online advertising.  

Earlier on Monday WPP said it had sold its minority stake in sports, entertainment and communications firm Chime for £54.4mln to Providence Equity Partners, which already owns 75% of the business.  

Last month WPP sold post-production services house The Farm Group to US firm Picture Shop without disclosing the terms.

In morning trading on Tuesday, WPP shares fell 1.3% to 998p. 

Quick facts: WPP PLC

Price: 623.2 GBX

Market: LSE
Market Cap: £7.64 billion

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