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.

• To contact the MediaGuardian news desk email media@theguardian.com or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. If you are writing a comment for publication, please mark clearly “for publication”.

• To get the latest media news to your desktop or mobile, follow MediaGuardian on Twitter and Facebook.

Contributor

Mark Sweney

The GuardianTramp

Related Content

Article image
WPP starts planning for Sir Martin Sorrell's successor
Global advertising group examining candidates in case chief executive leaves suddenly, annual report reveals. By Richard Wachman

Richard Wachman

30, Apr, 2009 @12:42 PM

Article image
WPP downgrades growth forecast
Sir Martin Sorrell's marketing services group reports organic revenue growth of 4.7% for the third quarter, lower than rivals. By Mark Sweney

Mark Sweney

28, Oct, 2011 @7:09 AM

Article image
WPP's pre-tax profit rises to £1.09bn
Sir Martin Sorrell says that marketing group 'got there ugly' and warns economy may be only halfway through 'a lost decade'. By John Plunkett

John Plunkett

01, Mar, 2013 @8:42 AM

Article image
WPP beats rivals as pre-tax profits leap by 18.7%
Sir Martin Sorrell's marketing services group benefits from strong UK performance in advertising, media and PR during 2013. By John Reynolds

John Reynolds

27, Feb, 2014 @8:42 AM

Article image
WPP inches back to growth
Sir Martin Sorrell's advertising group reports 1% March revenue rise – its first like-for-like increase since December 2008. By Mark Sweney

Mark Sweney

30, Apr, 2010 @7:25 AM

WPP's like-for-like revenue down 5.8% in first quarter
Sir Martin Sorrell's advertising group reports revenue below budget in first three months and unlikely to recover fully until 2010. By Oliver Luft

Oliver Luft

28, Apr, 2009 @6:59 AM

Article image
Sorrell on the run after pay revolt
Media Monkey: WPP chief who sparked shareholder protest to be London Olympic torchbearer

Monkey

10, Jul, 2012 @4:54 PM

Sir Martin Sorrell responds to criticism of his media buying arm - Advertising Week New York video

The WPP chief executive tells Mark Sweney that claims by Richard Desmond and others that Group M 'bullies' broadcasters are unfair

Mark Sweney and Helen Dagley

26, Sep, 2013 @8:17 AM

Article image
Martin Sorrell's WPP pay plunged to £13.9m for last year in charge
Former chief executive’s 2017 remuneration was below £70.4m in 2015 and £48.1m in 2016

Mark Sweney

27, Apr, 2018 @12:39 PM

Article image
WPP hires recruitment firm to help find Martin Sorrell successor
New York-based Russell Reynolds hired to aid search as ad firm tries to steady ship following departure

Mark Sweney

17, Apr, 2018 @5:48 PM