Court approves WPP shareholder meeting on takeover bid
The New South Wales Supreme Court has approved a WPP AUNZ shareholder meeting on 21 April to consider and vote on WPP plc’s takeover bid.
In addition, a PricewaterhouseCoopers report has concluded the takeover is fair and reasonable, and in the best interests of WPP AUNZ minority shareholders. According to the report, the market value of a WPP AUNZ share sits between $0.62 and $0.80; WPP plc upped its offer from $0.55 to $0.70 per share in December.
WPP AUNZ CEO Jens Monsees
The announcement, lodged with the Australian Securities Exchange this morning, also confirmed shareholders will be sent information about the scheme, the PwC report, and a notice convening the meeting to inform their vote. These documents will be posted to the ASX tomorrow and sent to shareholders around 22 March.
WPP plc already owns 61.5% of the company, and is attempting to acquire the remaining shares. The holding group’s local arm backs the deal, with the independent board committee unanimously recommending shareholders vote in favour of the takeover.
The proposal was first announced in early December. The revised offer of $0.70 gives WPP AUNZ an implied enterprise value of $717 million, according to documents filed with the ASX.
The announcement also comes a week after an amendment to the scheme implementation deed was made in light of the fully franked dividend declared with WPP AUNZ’s financial results in February. Shareholders are being paid a total dividend of 4.4 cents per share, fully franked, comprised of an ordinary dividend of 2.9 cents per share and the reinstatement of a special dividend payment of 1.5 cents per share in recognition of the 2019 sale of Kantar.
The amendment stipulated that the consideration offered under the scheme of $0.70 a share will be reduced by the amount of any permitted dividends paid or declared before the scheme, including the $0.04 a share.
WPP AUNZ’s recent financial results revealed the progress of its transformation under CEO Jens Monsees. The group reported $71 million in cost savings for 2020, including $13.6 million in government subsidies received to support jobs, $2.7 million from the installation of the campus model in Brisbane, Adelaide and Perth, and $13 million from general and administrative costs such as travel, entertainment, and refraining from entering awards.
The region’s, and the world’s, largest holding company also reported earnings before interest and tax of $61.9 million, down from 32.6% from the previous year, and net sales back by 14.1% to $612.3 million.
As the takeover bid proceeds, the transformation plan for WPP AUNZ is moving into its second phase, with scaling clients across the business, developing talent, and introducing the campus model in Sydney and Melbourne on the agenda.
A two-year project will see all of WPP’s businesses in Sydney and Melbourne brought into custom-built offices, designed to encourage collaboration between brands and staff. Monsees told Mumbrella in February the offices would be a “totally different working environment, less desks, more collaboration spaces”.
