WPP says it has completed the sale of 60% of Kantar to Bain Capital Private Equity, 'with respect to approximately 90% of the Kantar business', with the proceeds received; and says it will complete the remainder in the first half of 2020.
The reference to 90% of the business reflects the fact that Kantar consists of a large number of different companies in different global territories, including some joint ventures where the implications of the deal are more complicated, and some of these remain to be sorted out.
The global group agreed to sell the stake in July, and this was approved by WPP shareholders in October. WPP says total aggregate net proceeds after transaction costs, tax and its continuing investment in 40% of the equity of Kantar are expected to be around $3.1bn, or c.£2.4bn. About 60% of this ($1.9bn or £1.4bn) will be retained by WPP in order to reduce debt to the low end of the target leverage range of 1.5 - 1.75x average net debt/EBITDA for 2020, while 40% will be returned to shareholders ($c.1.2bn or £950m). The latter transaction, in the form of a share repurchase, will be split into two, with an initial tranche of c.£250m to be completed by March 2020.
CEO Mark Read (pictured) says the completion, 'earlier than anticipated, achieves the objective we set out in December 2018 to strengthen our balance sheet, and substantially completes our disposal programme. It is a major step in simplifying and focusing WPP, and we intend to return around 8% of our share capital to shareholders through a buyback programme. The partnership with Bain Capital means that we will participate in the future growth of Kantar as well as allowing our clients to continue to benefit from Kantar's services'.
Web sites: www.wpp.com and www.kantar.com .
All articles 2006-19 written and edited by Mel Crowther and/or Nick Thomas.