Matthew Freud was ‘within 24 hours’ of selling minority stake to WPP

Sir Martin Sorrell had talks with owner of Freud Communications over buying stake of just under 50% in deal valued at £90m

Matthew Freud came “within 24 hours” of selling a minority stake in Freud Communications to Sir Martin Sorrell’s WPP, in a deal valuing the marketing and PR agency at about £90m.

Freud, who has twice sold and bought back stakes in his PR business, is understood to have held talks with Sorrell earlier this year.

The discussions are understood to have focused on WPP taking a minority stake of just under 50% for about £45m.

One source with knowledge of the talks said a deal came close to being struck, before both parties walked away.

A second source with close knowledge of the talks said WPP walked away from the deal due to certain conditions not being met.

It is also understood that Freud had fleetingly considered a possible deal with Chime, in which WPP is the biggest shareholder, following founder Lord Bell’s buyout of the Bell Pottinger-branded PR businesses.

Freud founded his agency in 1985 and sold a stake to Abbott Mead Vickers, the ad agency owned by US company Omnicom, in 1994. He took back control in a £10m management buyout in 2001.

In 2005, Freud sold a 50.1% stake to French ad group Publicis Groupe in a deal that valued the business at £61m to £69m.

In 2011, he regained control of Freud Communications in a deal that valued the business between £75m and £100m.

Freud Communications made £8.5m in profits last year, valuing the company at about £90m on a standard media sector valuation by City analysts of 10 x profits.

Freud Communications and WPP had not responded to a request for comment at the time of publication.

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Mark Sweney

The GuardianTramp

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