Sorrell claims S4 Capital a mere ‘coconut’ after victory to snap up Dutch firm
Sir Martin Sorrell has previously described his new venture S4 Capital as a ‘peanut’ in comparison to former firm WPP.
Sir Martin Sorrell has dismissed claims he is planning to compete head to head with his former firm WPP as “ridiculous”, despite triumphing in a high-profile battle to buy Dutch firm MediaMonks.
The advertising tycoon told the Press Association his new venture, S4 Capital, had grown from a “peanut into a coconut” after snapping up the Netherlands-based agency for a reported 300 million euros (£266 million).
He pressed ahead with the deal despite receiving a legal threat from WPP alleging that he had broken a confidentiality agreement with the firm.
We are a bigger animal now, but still to say a 20 billion US dollar company can be frightened of a peanut or a coconut seems to be ridiculous. Sir Martin Sorrell, S4 Capital
WPP threatened to deny him £20 million in share awards if he pursued the MediaMonks acquisition.
Sir Martin, who left WPP in April following allegations of misconduct, said the deal for MediaMonks was a “game changer”, marking the first acquisition for S4 Capital.
But he denied it was an aggressive move to set up a rival to WPP following his acrimonious departure, having previously insisted S4 Capital was a mere “peanut” in comparison.
He said: “We’ve probably grown from being a peanut to a coconut with MediaMonks.
“We are a bigger animal now, but still to say a 20 billion US dollar company can be frightened of a peanut or a coconut seems to be ridiculous.”
Sir Martin, 73, said he would focus on expanding the existing operations at MediaMonks, as well as making further similar acquisitions with an aim to become a global digital-only marketing business.
But the move to fight a bidding war with WPP is set to fuel conflict with the FTSE 100 firm he founded more than 30 years ago.
It emerged in a shareholder circular sent out to investors in S4 Capital last week that he is planning to issue new shares to raise up to £1 billion to fund an advertising agency takeover spree to build up a new empire.
He said he wants S4 Capital to be more “nimble and agile”, while using MediaMonks as a platform to tap into the 200 billion US dollar (£151 billion) global market for digital advertising.
“We’re already in 10 countries – we want to develop that platform further, also adding more data analytics and digital media buying,” he said.
He added: “This is really our focus for the future. Clients want a much more nimble and agile organisation that’s more efficient and can respond quicker.”
WPP carried out an inquiry into allegations that Sir Martin misused company funds, but details of the investigation were never disclosed.
It has been alleged that the probe looked into whether he used company cash to pay for a sex worker, claims that Sir Martin has “strenuously” denied.
The WPP board has come under fire for its handling of his departure, which included a bumper £20 million payout. In addition, the ad guru is not hampered by a non-compete clause.
It means Sir Martin is able to go head to head with WPP for contracts.