LONDON – Sir Martin Sorrell is back at the
just weeks after he was forced to quit WPP, the advertising holding company he founded over 30 years ago.
UK stock market filings show Sorrell has set up a new investment vehicle called S4 Capital which has raised Â£ 51million for acquisitions. Â£ 40million came from Sorrell himself and the new vehicle has non-binding letters of support from other institutions committing up to Â£ 150million in additional capital, according to a statement.
S4 Capital is currently undertaking a “reverse merger” of London-based Derriston Capital to go public. Derriston is a little-known small investment shell company that went public two years ago. Derriston will change his name to S4 Capital after the reverse merger and Sorrell will become its executive chairman.
Sorrell said in a statement, âS4 Capital is a company that aims to build a growth-oriented multinational communications services business. There are significant development opportunities in the areas of technology, data and content. I can’t wait to make this happen. “
Derriston said in a statement that Sorrell was already in “preliminary discussions regarding a number of potential acquisitions.”
French financial newspaper Les Echos reported earlier this month that Sorrell would be interested in an offer on Kantar, the market research agency owned by WPP.
Liberum media analyst Iain Whittaker said in a note earlier this month that Kantar could be worth Â£ 3.5bn and said: “The obvious path is for Sir Martin to team up with a private equity partner for a bid and it should be noted that KKR was involved in the buyout of listed shares of market research firm GfK. “
Sorrell will own 75% of Derriston / S4 Capital once the reverse merger is completed. He will have a right of veto of the leaders and the motions of the shareholders.
Paul Roy, a seasoned financier who chaired the British Horseracing Association from 2007 to 2013, and Rupert Faure Walker, a former managing director of HSBC investment banking, are working alongside Sorrell in his new venture. Eton-trained Faure Walker first worked with Sorrell in 1987 in a hostile bid for advertising agency J Walter Thompson.
Sorrell’s dramatic comeback follows his departure from WPP in mid-April after 33 years at the helm of the company. Sorrell resigned amid an internal investigation into allegations of inappropriate behavior and abuse of assets. Sorrell denied the charges at the time, but said the “current disruption” “was putting too much unnecessary pressure on the company.”
Sorrell founded WPP, the world’s largest advertising agency, in 1988 through a reverse takeover of a packaging group then known as Wire and Plastic Products. Sorrell helped grow the business to a market value of Â£ 16 billion. The holding company owns leading advertising agencies such as JWT and Ogilvy & Mather, as well as public relations firms and market research agencies.