FGS Global

WPP has rejected an offer by KKR to take a controlling stake in FGS Global, according to a report in the Financial Times.

The British ad/PR conglomerate sold a 30 percent stake in the strategic communications and advisory shop to the private equity giant last year.

It owns a 55 percent stake in FGS while the PR firm's partners & employees hold the remaining shares.

WPP nixed the KKR offer because it was too low. KKR may make a higher offer for FGS, which WPP’s board would have to consider due to its fiduciary responsibility.

The FT noted that WPP suffers from a conglomerate discount, where its $10B market valuation is worth less than the sum of its parts, which include the newly formed Burson mash-up of Hill & Knowlton and BCW. KKR’s 30 percent stake in FGS is worth about $1.4B.

WPP, KKR and FGS management plan to take the PR firm public during the next two years.