WPP rules out bid for sports marketing group IMG
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.
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