Sir Martin Sorrell constructed his empire at WPP with acquisitions – a few of which, like Ogilvy and Chris Ingram’s Tempus media company have been bitterly contested – and, for some time, the technique labored effectively sufficient at his subsequent car S4 Capital.
S4 Capital, mainly by way of the acquisition of on-line content material manufacturing facility MediaMonks, was geared toward massive tech, the platforms which have roughly taken over the worldwide advert market. However, alas, even these behemoths fall susceptible to funds tightening (and, possibly, the realisation that they don’t want S4 as a lot as Sorrell hoped.)
S4 has simply issued one more revenue warning on the again of a 19.3% income drop to £198.4m in Q3. Cutbacks throughout the board are actually the order of the day, inviting the query: how small does S4 should be to be a viable enterprise? Uncharted territory for Sorrell.
Final yr Mark Penn’s Stagwell, which has many tech purchasers, made a tentative takeover method solely to be firmly rebuffed by Sorrell who has a controlling share within the enterprise. Different shareholders could have been extra tempted.
S4 now has a market cap of simply over £220m, barely lower than M&C Saatchi. At one level it was valued at a dizzying £5bn, with Sorrell’s personal stake price round £1bn.
Practically £800m of income remains to be price having for somebody. The fabled takeover-meister could discover it tougher to say no when the subsequent bid comes alongside.
