Expansive Sorrell 'Bids for dunnhumby'

Reports say WPP has now made a bid for a majority stake in retail data powerhouse dunnhumby, with current owner Tesco apparently keen to retain a minority share. Separately, the media giant's CEO Sir Martin Sorrell is said to be 'in line for a £36m bonus'.

Vague initial rumours about WPP's interest gave way in January to more confident reports that the UK-based marketing services giant was actively preparing a bid. Tesco, which was hit last autumn by a £263m accounting scandal and tumbling profit, has been considering the sale of the Clubcard operator - valued by analysts at up to £2bn - since September or October.

Reuters sources told the news agency in February that Tesco was looking to retain a stake in dunnhumby, and that 'around six or seven parties, including private equity-led bidding groups, had shown a serious interest in the business'. Reuters now says sources have confirmed WPP has made the bid, but that both WPP and Tesco are not commenting at present.

Dunnhumby was founded in 1989 by husband and wife team Edwina Dunn and Clive Humby. The firm analyses Tesco till data captured through the supermarket's Clubcard, to analyse the shopping behaviour, purchasing patterns, and trends of millions of households worldwide; and is said to have saved Tesco around £350m a year since the two firms began collaborating in 1995. Halfway through that period, Tesco became its owner.

Other known and potential suitors for dunnhumby include Warburg Pincus, Carlyle Group, TPG, and the US supermarket chain Kroger, which is Tesco's partner in the US arm of dunnhumby. Some of these are likely to favour full ownership of the analytics pioneer, while WPP's recent record (including partnerships with Rentrak and comScore) suggests it's not averse to extending its reach through JVs, asset swaps, majority and minority buys and other more complex financial arrangements.

Meanwhile www.campaignlive.co.uk reports that WPP Chief Exec Sir Martin Sorrell, 'whose pay has caused protests among shareholders in the past', but continues to rise due to a performance-related plan, is 'in line to receive a £36 million bonus'. Sorrell, who built the company from a start of two employees to the 100,000 plus it employs today, is on record saying he finds controversy over his awards 'deeply disturbing' and that the group's compensation decisions are 'competitively fair' against big rivals in the US and France.

Web site: www.wpp.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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