WPP’s Mark Read on Kantar: ‘Emotionally, I would have kept it. Rationally, selling is the right thing’
As the sale of Kantar progresses WPP’s chief executive Mark Read has said that “rationally” he knows it’s the right move even if he’s not convinced “emotionally.”
Mark Read
It was revealed today (18 March) that Kantar was shedding all of the individual brands for its various services, including Kantar Millward Brown, Kantar Health, Kantar Consulting and Lightspeed Research, and simplifying the structure under a single brand name.
The hope is that it will strengthen Kantar’s position in the marketplace. It comes as WPP pushes forward to divest its ownership in the company, though bosses at the data firm were insistent that the rebranding exercise was not done to attract buyers.
Speaking at Advertising Week Europe on the same day as the consolidation, Read said the ideal scenario would see WPP retain “between 25%-40%” of its stake in the business – which is valued at around £3.5bn – as a “financial and/or strategic partner” enters the mix.
“Data is critically important to our clients and critically important in the modern marketing ecosystem but WPP should be judged more on what data we use in our work than whether we own it. Once we decided that, we saw the opportunity to turn Kantar into the world's leading data business,” he said.
“There's a lot of value that we can unlock in Kantar. Maybe emotionally I would have preferred to keep it inside WPP but rationally there’s a lot to do and this is the right way to go about releasing that value.”
Little has been revealed about the progress of the sale, which was first reported in April 2018 before it was formally announced last November.
Some have speculated that former WPP boss Sir Martin Sorrell’s new venture S4 Capital could be interested in a stake – however, it would arguably be a stretch given the company’s earnings today which, while positive, indicated its full-year 2018 pro-forma [the figures if it had traded for a full year] revenue was £135.9m (up 58% on 2017), while pro-forma gross profit was £105.2m (up 49% on 2017).
Fellow holding company boss John Wren has also dismissed rumours it was interested in the acquisition.
Prior to the beginning of the formal sale proceedings, CVC Capital Partners was reported to have approached WPP about a potential sale. Previous talks between WPP and Nielsen over a Kantar-Nielsen merger broke down when the two parties could not reach an agreement.
Earlier this month, Read told analysts that the outcome of the sale discussions would be announced by the end of the second quarter.
At WPP, the chief exec stressed that it has no other “major” M&A activity planned for the immediate future following last year's mega-mergers of Wunderman and JWT, VML and Y&R, and the consolidation of five of its design consultancies into one agency called Superunion.