 Martin Sorrell |
WPP's Martin Sorrell is expected to challenge Bain Capital's $1.4B bid for Japan's No. 3 ad agency Asatsu-DK, a successful takeover would mark the first buyout of a major Japanese ad company.
The Financial Times reports that WPP, which is ADK's biggest shareholder with a 24.7 percent stake, believes Bain's offer "severely undervalues the firm."
A Bain-ADK tie-up would end WPP's 19-year alliance with the firm that was designed to give the British ad/conglom a piece of the Japanese market behind giants Dentsu and Hakuhodo.
Bain wants to purchase all outstanding shares and privatize ADK to capitalize on its "highly competitive digital offering" content business and animation capabilities.
The private equity firm's bid, which launched today, represents a 15 percent premium over the value of ADK's shares.
Bain' needs only 50.1 percent of ADK's shares to notch its deal. The FT speculates the deal is structured to succeed in the event that Sorrel's fails to tender WPP's shares in ADK.
The board of ADK released a statement that noted differences with WPP over business strategy and a difficulty to make the "swift and flexible decisions" required in today's fast-changing business environment.
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