WPP Merges Australian, New Zealand Businesses With STW -- Update
14 12월 2015 - 8:20PM
Dow Jones News
By Simon Zekaria
LONDON--WPP PLC (WPP.LN) said Monday it is merging its
Australian and New Zealand businesses with marketing and
communications group STW Communications Group Ltd. (SGN.AU), as the
world's largest advertising holding company launches a
communications services firm with sales of around three-quarters of
a billion dollars.
WPP, the U.K.-based owner of ad companies such as Ogilvy &
Mather and Grey, will raise its shareholding in STW Communications
to 61.5% from 23.6%, becoming the majority stakeholder in the
Australian-listed company.
Under the terms of the deal, WPP will merge its Australian and
New Zealand businesses with STW, which will have an enterprise
value of A$512 million ($368 million), paid for through new STW
shares and a loan.
STW will issue the new shares to WPP at A$0.915 each,
representing a premium of 30% to their 10-day volume-weighted
average price before Monday.
The merged group will have earnings before interest and taxes of
A$142 million on revenue of about A$1 billion, and be WPP's primary
vehicle in Australia and New Zealand.
The new business will remain listed on the Australian Securities
Exchange and will change its name following shareholder approval.
WPP will have the right to appoint a majority of directors to STW's
board.
The transaction is dependent on the approval of STW
shareholders, the Australian Competition and Consumer Commission,
and the Foreign Investment Review Board, WPP said in a
statement.
At the end of October, WPP reported rising sales, boosted by its
North American operations. Sales rose 5.9% from a year earlier to
GBP2.9 billion ($4.4 billion) for the three months ended Sept.
30.
The company is boosting its overseas presence to counter a
slowing home market, as advertisers adopt a nimble approach to
seeking deals to outflank rivals in local markets.
"The merger continues WPP's strategy of investing in important
geographic markets," WPP said in a statement.
On Monday, shares in WPP rose modestly in early trading. The
company, headed by longtime Chief Executive Martin Sorrell, is
valued at nearly GBP20 billion.
Write to Simon Zekaria at simon.zekaria@wsj.com
(END) Dow Jones Newswires
December 14, 2015 06:05 ET (11:05 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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