WPP says ADK is dodging the stock purchase agreement and ignoring shareholder advice in Bain Capital deal

WPP gives statement regarding ADK's deal with Bain Capital

WPP has released a statement about ADK and Bain Capital’s intent to buy out WPP’s shares and delist itself from the Tokyo Stock Exchange, countering claims that WPP’s investment in ADK was hindering digital growth.

The announcement of the deal a week ago was followed by a statement by ADK, which laid blame on WPP’s majority shareholding as a large factor in its inability to move quickly on digital decisions, largely because it could carry out many partnerships outside the WPP Group.

The statement from WPP threw blame back at ADK, suggesting that the management had resisted opportunities around digital and had made bad financial decisions.

“ADK’s management have consistently resisted opportunities to improve the performance of its overseas operations and exploration of significant digital opportunities, preferring to invest in disastrous acquisitions and consolidations such as Gonzo and Bungeisha, the costs of which have not been fully exposed, along with the disposal of DAC in 2011 at a lower price than WPP’s indication and the reduction of ADK’s stake in Video Research Interactive,” read the statement.

WPP also said the deal undervalues ADK, a sentiment it claims is shared by other shareholders, and has criticised the move because it has not taken into account other deals that may have been of greater benefit to shareholders. The statement asked: “have the Board ever considered or discussed any alternative bona fide offers or proposals for the company which may be of greater benefit to the stakeholders in the business including its clients and its people or has the only consideration been management’s concern about their own position in the future? Has Bain Capital ever given ADK’s management reassurance about their own position as part of this transaction and, if so, should not those terms be disclosed?”

Lastly, WPP claimed that ADK has,“ improperly attempted to terminate its co-operation and business alliance agreement with WPP, which it knows full well that it cannot do, as on previous occasions it had abided with this instruction.”

Get The Drum Newsletter

Build your marketing knowledge by choosing from daily news bulletins or a weekly special.