WPP rules out bid for sports marketing group IMG

LONDON Thu Oct 10, 2013 5:12pm IST

Stocks

   

LONDON Oct 10 (Reuters) - Advertising agency WPP believes that a price tag of up to $2.5 billion for IMG Worldwide is too high to justify a bid for the sports marketing group, CEO Martin Sorrell said on Thursday.

"We would love to own IMG," Sorrell told the Leaders in Football sports industry conference. Asked if WPP was bidding, he added: "No, we can't afford it."

IMG, set up by American sports agent Mark McCormack in 1960, is up for sale after the death in 2011 of owner Teddy Forstmann, who paid $750 million for the business in 2004.

Sorrell said he believes that private equity company Silver Lake and its partner William Morris Endeavor Entertainment are the most likely purchasers but noted strong competition.

"People are talking about 2 to 2.5 (billion dollars). They are talking about 20 bidders, 10 bidders going into the second round. That's nose-bleed territory for us," Sorrell said.

Sorrell estimates that IMG generates annual revenues of about $1.25 billion and core profit of between $170 million and $200 million.

Britain's WPP had been rumoured as a possible buyer, given that it often deals with sports sponsors and rights owners. Sorrell also worked with McCormack at IMG early in his career and is also a director of Formula One motor racing.

WPP, which is set to yield its position as the world's largest advertising agency once Publicis and Omnicom merge, has a market capitalisation of more than 16 billion pounds ($25.5 billion).

However, Sorrell indicated that the level of interest in IMG and the cachet of a company with clients including tennis stars Novak Djokovic and Maria Sharapova had made it prohibitively expensive.

Interested parties include a combination of private equity firms KKR and New Mountain Capital, as well as sports and entertainment company Creative Artists Agency. European investment group CVC Capital Partners is another likely bidder.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Kerry in India

REUTERS SHOWCASE

Deadly Landslide

Deadly Landslide

Landslide near Pune kills 10, scores feared trapped.  Full Article 

Fed Policy

Fed Policy

Fed presses forward with bond buying, cites uptick in inflation.  Full Article 

Big Infra Deal

Big Infra Deal

Piramal, Dutch APG tie up for $1 bln infra investment  Full Article 

E-Commerce

E-Commerce

Amazon says to invest $2 billion more in India   Full Article 

Lupin Results

Lupin Results

Q1 net profit up 56 percent on higher U.S. drug sales   Full Article 

Smuggling Gold

Smuggling Gold

Air India staff found smuggling gold  Full Article 

Economy Reboots

Economy Reboots

U.S. economy back on track with strong second-quarter rebound .  Full Article 

Auto Sector

Auto Sector

VW closes in on Toyota as global auto leader  Full Article 

Expanding Reach

Expanding Reach

Tata to invest $35 bln over 3 years, focus on new businesses   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage