Havas has been looking at potential ways to engage with rival holding company WPP and has been understood to have held early-stage discussions about the group. The company has been examining various strategic possibilities involving WPP, which owns PR agency Burson, and has been exploring what different forms of involvement could look like.
In the course of these developments, several scenarios have been indicated as per media reports. It has been suggested that Havas may consider acquiring WPP’s media arm or building a sizable stake that could allow the company to seek a board seat. Reports have also indicated that private equity firms Apollo and KKR have assessed parts of WPP’s business, although sources have been cited as playing down the likelihood of either firm making a bid. Apollo has been described as not considering any discussions at present, while KKR has not offered comment.
The emerging interest has come during a difficult phase for WPP, whose stock price has fallen 16% to a 27-year low after the company missed earnings forecasts once again. CEO Cindy Rose has characterised the group’s recent financial performance as unacceptable and has stated that corrective action is being taken. WPP has also appointed McKinsey to advise on its strategy review.
Meanwhile, WPP’s CEO Cindy Rose and chair Philip Jansen have purchased a combined 100,000 shares worth about £287,000 in what has been viewed as an effort to stabilise investor sentiment, as per reports. UK governance rules prohibit such buybacks if a company is engaged in formal merger or takeover discussions.
Havas has maintained that it does not comment on market speculation, as per reports.
