Bain Capital emerges as leading bidder for WPP's Kantar unit

London

BAIN Capital is in exclusive talks to buy a majority stake in WPP Plc's Kantar unit in a deal valuing the market-research business at about US$4 billion including debt.

The buyout firm's proposal is subject to negotiation and there is no guarantee that talks will result in a deal, WPP said in a statement on Monday. The company was competing against Apollo Global Management, Platinum Equity and Vista Equity Partners in the final round of bidding, people familiar with the auction said previously.

The Kantar sale is part of WPP chief executive officer Mark Read's push to cut debt and simplify the global ad agency network after ditching his predecessor Martin Sorrell's acquisition-fuelled growth strategy.

The price being discussed appears to be in line with expectations and the exclusive talks should give confidence that a deal will be completed, allowing WPP to significantly reduce debt, Liberum analysts led by Ian Whittaker wrote in a research note.

WPP's stock is up 20 per cent so far this year.

Mr Read is focusing on improving WPP's digital marketing skills after losing work with some key consumer goods clients. The owner of agencies including Ogilvy and Wunderman Thompson has struggled with the shift to online marketing and faces a growing threat from Facebook and Alphabet's Google.

Mr Sorrell had strongly advocated keeping Kantar, which analysts say has underperformed the rest of WPP in recent years. The bidders are comfortable with Kantar's basic business model and want to speed up its delivery of data and services and add more digital activities, its CEO Eric Salama said last month. BLOOMBERG