WPP to ‘explore’ selling 20% stake in Chime following £44m JMI acquisition
WPP could sell its 20 per cent share in Chime Communications after it criticised the company for its takeover of Just Marketing Inc (JMI) for $71m (£44m).
Chime has said that WPP did back the takeover of the company, which arranges sponsorship, hospitality and rights deals in Formula One, NASCAR and IndyCar motorsports, but that Chime had rejected WPP’s desire to raise its stake in Chime to 29.9 percent as part of the transaction.
In a statement, WPP said: “Our principal concern is about the quality of the JMI deal, going to shareowners yet again to finance it, and a failure to focus on organic growth as promised.
"WPP has now stated that if Chime proceeds with the acquisition on its current terms, it is WPP's current intention to explore a sale of its stake in Chime.”
JMI was founded by American former professional driver Zak Brown in 1995, and reported an operating profit of $4.7m on revenues of $40.8m in 2012. Following the takeover, Brown will remain CEO of JMI within the Chime Group, heading up a new motorsport division and also becomes global head of business development within CSM Sport & Entertainment.
Discussing the takeover, which was announced on Friday, Jim Glover, CEO of CSM Sport & Entertainment, said: “JMI’s reputation and performance are both outstanding and make the company a natural choice for CSM Sport & Entertainment as an acquisition. As the industry leader no-one knows global motorsports marketing like JMI and having Zak and his talented colleagues on the team will help build on CSM Sport & Entertainment’s leading position in the industry."
The move will allow Chime to expand into the US market.
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WPP plc is a British multinational communications, advertising, public relations, technology, and commerce holding company headquartered in London, England. It was...
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