WPP to sell stake in Kantar as group revenues decline

mark-read-wppWPP is preparing to sell a stake in data and insight division Kantar and has already appointed Goldman Sachs to oversee the process.
In a trading update for the third quarter of its financial year, in which revenue for the period fell by 0.8% to £3.76bn, WPP said there is a “significant opportunity to develop Kantar” into a world-leading brand.
Earlier this year, The Financial Times reported that private equity firm CVC Capital had made enquiries about buying Kantar, for about £3.5bn. In 2015, CVC was also linked with a bid for DunnHumby, which was put up for sale by Tesco, although the supermarket eventually abandoned the sell-off.
In a statement, WPP said: “We believe in the potential for Kantar but given our many priorities, we need to make tough choices and we believe that the best way to unlock this potential is with a strategic or financial partner.”
WPP’s board has approved a formal process to review the strategic options. The group is expected to remain a share owner in Kantar with “strategic links to ensure that the benefits to clients are realised”.
“Preparations are underway, involving Kantar management, and unsolicited expressions of interest have been received,” WPP added.
The move comes as WPP chief executive Mark Read said the company’s performance during the quarter has reinforced the need for “decisive action and radical thinking” in order to turn around the business.
He added: “The slowdown primarily reflects a further weakening of the performance of our businesses in North America and in our creative agencies, issues that we highlighted in our interim results.
“As previously stated, our industry is facing structural change, not structural decline, but in the past we have been too slow to adapt, become too complicated and have under-invested in core parts of our business. There is much to do and we have taken a number of critical actions to address these legacy issues and improve our performance.”

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