S4 Capital: Multiple Approaches
As we know from the world of M&A, a company can receive any number of approaches, at any time, some serious, some opportunistic, and most fade away as if they were never there. Last March it seemed that the ailing (share price) advertising company, which was Sir Martin Sorrell’s reboot after founding WPP (WPP) would be rescued by M&A cavalry. The Times reported how the company had received multiple approaches, after a failed approach from Stagwell at the end of 2023. Apparently, Sir Martin said no to $700m, as compared to the current market cap of £130m / $175m. Ouch. The situation now is that Sir Martin notwithstanding, shareholders would probably jump at an offer of even half the Stagwell number. They would also be biting anyone’s hand who managed to rescue them from the ongoing sinking feeling of an advertising company battling with the after-effects of tariff uncertainties, the surge in AI fuelled digital marketing, and non-sticky clients. One also wonders whether the no to previous deals was as much to do with Sorrell simply enjoying being the big CEO, and not wanting to finally hang up his metaphorical presentation whiteboard?
This Is The Time
But with all the water under the bridge, and mindful that the latest revelation from Sky News that SFOR has received multiple merger approaches, one can now say that given the fundamentals, the position of the business, and its current valuation, it would be surprising if the reported offers on the table are rejected, whatever level they may be. This is especially the case given that as Sky has reported, there are deals that would offer strategic combinations with other businesses, something which would make it easier for SFOR to weather the current headwinds in its space.
