David Blecken
Oct 12, 2017

ADK 'resisted opportunities', preferring 'disastrous' investments: WPP

Accusations fly as the ADK-WPP saga turns ugly.

WPP CEO Sir Martin Sorrell (AFP)
WPP CEO Sir Martin Sorrell (AFP)

Resistance to Bain Capital’s bid to buy ADK is intensifying, with WPP accusing the Japanese company of having “improperly attempted to terminate its cooperation and business alliance”.

In a new statement, WPP notes that ADK’s sale of its 2.4 percent stake in WPP, which is worth around US$576 million, goes against shareholder advice and would trigger “damaging” tax charges and cancel promised dividends.

WPP’s aggressive statement follows one from ADK on Tuesday that aimed to clarify its position on the matter and reiterated its support for Bain’s $1.35 billion offer. ADK also refuted the idea that termination of its partnership is invalid, claiming “either party may terminate [it] at any time by giving not less than 12 months’ written notice”.

In its statement, WPP reinforced its own position: that the tender offer “significantly undervalues ADK”. Silchester International Investors, ADK’s second-largest shareholder, has also publicly expressed that view.

See all our coverage of the ADK-WPP fight over Bain's bid

WPP also takes issue with ADK’s apparent failure to seriously explore alternatives to Bain’s offer. It suggests the board acted purely out of self-interest and ignored options that could benefit stakeholders. ADK claims to have “sounded out” other potential buyers, but admitted that Bain was the only one to make a proposal.

When Bain’s offer first surfaced, ADK indicated that its partnership with WPP had failed to deliver tangible benefits and positioned itself as needing to break free in order to realise future ambitions, particularly regarding digital transformation and international growth.

WPP hits back in its statement, suggesting incompetence on ADK’s part. From WPP’s perspective, ADK’s management “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”, selling DAC for too low a price and reducing its stake in Video Research Interactive.

Beyond stating its belief that ADK has acted improperly, WPP does not directly raise the possibility of legal action. However, in its statement dated 4 October, Silchester pointed to a “significant risk of litigation” if ADK and WPP fail to reach an agreement.

ADK did not immediately respond to request for comment on WPP's statement.

Source:
Campaign Japan

Related Articles

Just Published

4 hours ago

1000 Media: Can Nas Daily’s storytelling magic ...

Nuseir Yassin’s latest digital marketing company bets on fast, AI-powered, emotion-driven storytelling to help brands break through digital clutter—starting with India.

12 hours ago

Delicia Tan adds Singapore to remit in Edelman ...

Tan takes on an expanded role as CEO of Edelman Singapore, while retaining her leadership of Hong Kong and Taiwan, following Julia Wei's upcoming departure. In other Edelman news, Vorasit Turongsomboon has been appointed MD for Thailand.

13 hours ago

Selfie-obsessed humans can now match with shelter dogs

Cheil Worldwide's latest campaign uses AI to match humans with shelter dogs based on looks and personality. Ad Nut is baffled and judging you.

13 hours ago

'The holding company model has been broken for a ...

EXCLUSIVE: Fresh off two major acquisitions in 2024, Jamie Posnanski unpacks why the traditional agency-supplier model needs an overhaul, combating transformation fatigue, and why so few clients believe their agency models are fit for purpose.