New Year, New WPP

WPP has announced further details of its proposal to return its headquarters from Ireland to the UK, including a timetable which sees shares in 'New WPP' trading on the LSE at the start of 2013.

The group, which includes insight division Kantar, moved its 'domicile' to Ireland in 2008 in protest at what it described as 'the current complexity' of the UK tax system, under the then Labour government. The move back was first hinted at in April 2010 and became likely in late August this year.

CEO Sir Martin Sorrell had talked of an estimated £50m in savings from avoiding paying tax on 'foreign profits' - nearly 90% of the Group's total revenue. Today's announcement comes as a number of large corporations - including Google, Amazon and Starbuck's - have faced anger and a parliamentary grilling over the small amount of tax they pay in the UK (none at all in some cases).

The current Coalition Government is to implement a new regime for taxing foreign profits as of 1st January 2013, and WPP says the concerns its Board had in 2008 no longer apply, stating: 'A return to the UK should not have a tax cost for the WPP Group, at least for the remainder of this Government.'

The move will be made via the device of a new parent company for the WPP Group, to be known as 'New WPP', to be incorporated in Jersey and tax resident in the UK. The Scheme will not result in any significant changes in the day-to-day conduct of the business of the group, or of its strategy - and New WPP will have the same board and management team.

A circular setting out full details of the Scheme is due to be sent out to share owners tomorrow, with a Prospectus issued shortly. Implementation of the Scheme is conditional on its being approved by a majority in number and three-fourths in voting rights of current WPP shareholders; the passing of certain resolutions; and the granting of permission to admit shares by the UK Listing Authority and the London Stock Exchange.

The Court Meeting and the General Meeting are expected to be convened to be held on 11 December 2012 in Dublin; and the hearing of the Jersey Court to sanction the Scheme is expected to be held on 18 December 2012. All being well, trading of New WPP shares on the LSE should commence on 2nd January 2013.

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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