Minority shareholders of WPP AUNZ vote in favour of WPP plc takeover

The shareholders of WPP AUNZ have voted in favour of the takeover bid from WPP plc this morning, meaning the global company will become the sole owner of the local agency holding group, acquiring the remaining 38.5% of shares in the company it did not previously own.

Shareholders who held their share on the total dividend record date of 31 March 2021 will be paid $0.70 per share, as offered in December as an update to WPP plc’s bid, less the value of the special dividend of $0.044 per share fully franked paid at the end of March.

The dividend, which was declared with WPP AUNZ’s full-year financial result in February, was made up 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.

87.5% of minority shareholders present and voting at the scheme meeting, either in person or by proxy, voted in favour of the scheme resolution, and 96.45% of votes cast by minority shareholders at the scheme meeting were in also in favour, vastly exceeding the 75% requirement.

Commenting on the result, chairman Robert Mactier said: “Minority Shareholders have overwhelmingly voted in favour of the transaction which was negotiated on their behalf by the Independent Board Committee.

“The significant transaction premium, compared to recent trading levels, which was based on an improved outlook for the business which was delivered as a result of the significant work from Jens Monsees and the management team in executing on the group’s transformation strategy.

“That the business was in a position to both weather the COVID-19 crisis, and emerge as a stronger business, is a credit to Jens and his team.

“WPP AUNZ will continue to be a strong force in the Asia Pacific region under full ownership of WPP plc.”

WPP global CEO Mark Read stated: “We are delighted that the shareholders of WPP AUNZ have voted in favour of the scheme of arrangement. Australia and New Zealand have been very important markets for us for many years, and we look forward to investing further in our great agency brands here.

“Our priorities are to continue to provide outstanding service for our clients, invest in the capabilities modern marketers need to succeed, support our people’s development and work even more closely with our fantastic people and agencies to grow the business.”

Tomorrow, the board will meet to determine whether it will pay a special dividend of $0.156 per share, which will bring the scheme payment to $0.50 per share.

The next stage of the process will be the second court date to approve the scheme Friday 23 April, with the effective date listed as Monday 26 April. WPP AUNZ will apply to the ASX for its shares to be suspended from official quotation from close of trade on that day. The implementation date is expected to be 18 May.

The takeover bid was launched at the end of November last year offering minority shareholders a price of $0.55 per share in cash. The offer was upped in December to $0.70 per share, giving WPP AUNZ an implied enterprise value of $717 million.

In March, the New South Wales Supreme Court approved the shareholder meeting and a PricewaterhouseCoopers report has concluded the takeover is fair and reasonable, and in the best interests of WPP AUNZ minority shareholders, as it found that the market value of a WPP AUNZ share sits between $0.62 and $0.80.

In 2015 the then-Sir Martin Sorrell-led WPP took a 61% stake in STW, merging the Australian outpost of WPP with the local holding company and forming WPP AUNZ as it is known today.

Today’s vote marks a new chapter in a long period of tumult and changes at WPP AUNZ.

Former CEO Mike Connaghan resigned from his post in 2018 after 12 years with the business and two as chief executive of the holding group. His resignation triggered the global search for a new CEO, announcing Jens Monsees in May 2019, who commenced his role in October of that year.

Monsees soon began rolling out changes in the group, announcing his transformation plan with the full-year financial results in February 2020. Monsees’ plan saw the implementation of a campus model in Brisbane, Adelaide and Perth in an effort to streamline the operations in the smaller posts of the business and reduce costs. Monsees also warned that the number of agency brands would be reduced through a merger and acquisition strategy.

This came to fruition with the purchase of Perth agency Meerkats in August and the mergers of AKQA and WhiteGrey to form AKQA group, the later announcement that Ikon Communications would be rolled into the former, as well as Geometry joining VMLY&R as VMLY&R Commerce.

The group has also seen a number of long-standing senior exec leave, including chief customer officer Sunita Gloster, chief of central support Rob Currie, Group M CEO Mark Lollback, Ogilvy CEO David Fox, CEO of public relations Kieran Moore, and John Steedman, who retired in October.

In his address to the shareholders this morning, Mactier thanked Monsees for his efforts in “delivering a transformation of our business model” against the backdrop of COVID-19 which positioned the business to receive the “very significant premium proposal from WPP plc”.

“Transformation does not come without pain and the need to make tough decisions, particularly in a year like no other,” Mactier said.

“Thank you to Jens and our senior leadership team and the many, many talented employees across our many disciplines. Regardless of the outcome of today’s vote you should feel proud of your achievements over the last few years and have great confidence in the future opportunities ahead of you.

“You should all also be proud to have continued the transformation journey while also managing the scheme process, which came on the heels of an extremely challenging 2020.”

1:41pm 21 April – the story was updated to include comments from WPP CEO Mark Read


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