STW enters the history books as WPP merger flies through and final links to Singo cut

STW no more as name change approved


Twenty three years after John Singleton listed his ad agency on the stock market, his initials SGN will finally disappear from the exchange ticker after the merger of STW Group and WPP received the final tick of approval from shareholders at the last-ever STW AGM.

But executives of the $850m company have been wary of offering forward guidance on its performance until at least August, citing the complexity of the deal, which saw WPP take a 61% stake in STW.

Mike Connaghan says no market guidance until August

Mike Connaghan says no market guidance until August

Chief executive, Mike Connaghan, said that he did not want to oversell or undersell the prospects of the company as it moved forward, with STW agencies including Ogilvy and JWT now aligned with former WPP standalone Australian operations, including GPY&R.

Speaking with Mumbrella after the historic AGM, Connaghan said the review of STW operations, launched last year, was likely to see more divestments and internal mergers of brands.

“Clearly we’re here to grow this business; if we’re not growing it then someone else will. I think there is some really clear low-hanging fruit where we can be better together and certainly the synergies of the businesses and bringing people closer together are absolutely there,” Connaghan said.

“It’s 47 days old and we only really got our hands on the businesses in April. That said, it got announced in December and we’ve been working closely with a lot of the guys on what the opportunities are so there’s been a lot of stuff operationally going on in the background – shared pitches and shared resources and working together.

“But we didn’t have access to any of the finances or any of the decisions until after April.”

With Connaghan committed to the CEO role into the future he said he was looking forward to the next steps.

“For me it’s been a long time coming and I was very enthusiastic to get it done. It should have happened a few years ago but it didn’t, for lots of different reasons. It’s happened in a really interesting way; we’ve stayed listed and we’ve effectively acquired the businesses in Australian and New Zealand, so it is quite unique.

“Both the STW side and the WPP side have a way to go to come together. Bringing those two cultures together I think is a big job.”

Having been an original shareholder in the business when it first listed, Connaghan said the merger was the completion of a vision.

“I think what we have done here today is one of the steps in completing the vision which Russell (Tate) set up in the late ’90s when we did the deal with Ogilvy.”

WPP AUNZ will be the fifth-largest part of the company in the world and the ASX listing will be changed from SGN (the last link to John Singleton’s original listing of the agency), while STW (Singleton Tate WPP) will be retired as the local brand.

robert mactier - wpp aunz

Mactier: To review local executive remuneration strategies against WPP globally

Close to 30 shareholders attended the final AGM, where chairman Robert Mactier also underlined that STW would be reviewing its executive remuneration strategies over the coming months to bring them more into line with how WPP operated globally.

Connaghan noted the shift at WWP AUNZ, where the business had moved from wanting to service 100% of a client’s advertising budget to servicing 100% of its customer experience budget.

Shareholders raised a number of issues, including danger of diluting dividends by offering executives new shares rather than buying them off the market.

Connaghan also showed off recent work by group’s agencies, including the award-winning McWhopper work for Burger King and World Peace Day by Y&R New Zealand, as well as the prototype weather predicting peg, Peggy, developed by J. Walter Thompson for Omo.


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