Sir Martin Sorrell, the advertising mogul, has received a number of merger approaches for S4 Capital, the London-listed marketing services group he founded seven years ago.
Sky News can reveal that Sir Martin has been contacted in recent weeks by potential suitors including One Equity Partners, a US-based private equity firm which focuses on acquiring companies in the healthcare, industrials, and technology sectors.
This weekend, analysts suggested that One Equity would seek to combine S4 Capital with MSQ, a creative and technology agency group it bought in 2023.
Further details of the possible tie-up were unclear on Saturday, including whether a formal proposal had been made or whether S4 Capital might remain listed on the London Stock Exchange if a deal were to be completed.
S4 Capital is also understood to have attracted recent interest from other parties, the identities of which could not be immediately established.
In March 2024, the Wall Street Journal reported that Sir Martin had rebuffed several offers from Stagwell, an advertising group led by Mark Penn, a former adviser to President Bill Clinton.
New Mountain Capital, another American private equity firm, was also said at the time to have held talks about buying parts or all of S4 Capital.
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News of One Equity’s approach puts the venture founded by one of Britain’s most prominent business figures firmly in play after a torrid period in which it has been buffeted by macroeconomic headwinds and a number of accounting issues.
Sir Martin founded S4 Capital in 2018, months after his unexpected and acrimonious departure from WPP, the group he transformed from a manufacturer of wire baskets into the world’s largest provider of marketing services.
The businessman, who has voting control at S4 Capital, used his deep network of institutional relationships to raise money for an acquisition spree at S4, which included technology-focused agencies such as MediaMonks and MightyHive.
S4’s clients now include Alphabet, Amazon, General Motors, Meta, T-Mobile, and Walmart.
Sir Martin’s decision to target acquisitions in the digital content and programmatic media arenas reflected the priorities of what he described as a marketing services group for a new era.
At WPP, he was the architect of a now-widely replicated strategy to assemble hundreds of agency brands under one holding company.
By the time he stepped down, WPP was the owner of creative agency networks such as JWT and Ogilvy, while its media-buying muscle was channelled through the global subsidiary GroupM.
The latest approaches for S4 Capital come during a period of profound change in the global marketing services industry, as artificial intelligence dismantles practices and creative processes that had evolved over decades.
Sir Martin has spurned few opportunities to criticise his successor at WPP, Mark Read, as well as the wider advertising industry, in the seven years since he established S4 Capital.
Last month, WPP announced that Mr Read would be replaced by Cindy Rose, a senior Microsoft executive who has sat on the company’s board as a non-executive director since 2019.
“Cindy has supported the digital transformation of large enterprises around the world – including embracing AI to create new customer experiences, business models and revenue streams,” the WPP chairman, Philip Jansen, said.
“Her expertise in this landscape will be hugely valuable to WPP as the industry navigates fundamental changes and macroeconomic uncertainty.”
WPP has also forfeited its status as the world’s largest marketing services empire to Publicis, and will be shunted even further behind the sector’s biggest players once Omnicom Group’s $13.25bn (£9.85bn) takeover of Interpublic Group is completed.
At the time of Sir Martin’s exit from WPP in April 2018, the company had a market capitalisation of more than £16bn.
On Friday, its market value at its closing share price of 367.5p was just £4.23bn.
Last month, the advertising industry news outlet Campaign reported that WPP had held tentative discussions with the consulting firm Accenture about a potential combination or partnership, underscoring the pressure on legacy marketing services groups.
This weekend, it remained unclear how likely it was that Sir Martin would consummate a deal to combine S4 Capital with another industry player such as One Equity-owned MSQ.
Shares in S4 Capital closed on Friday at 21.2p, giving the company a market capitalisation of £140m.
The stock has fallen by nearly 60% during the last 12 months, and is more than 90% lower than its peak in 2022.
At one point, Sir Martin’s stake in S4 Capital was valued at close to £500m.
A spokeswoman for S4 declined to comment, while a spokesman for One Equity Partners said by email: “OEP is not commenting on this matter.”
