WPP takes controlling 61 per cent share in STW creating Australia’s biggest marketing group
Sir Martin Sorrell
Australia’s largest agency holding group STW Communications has confirmed a “merger” with the world’s largest holding group WPP.
STW went into a trading halt on Friday when Mumbrella revealed it was deep in negotiations for the tie-up with WPP, led by Sir Martin Sorrell, with today’s announcement confirming it now had a controlling 61 per cent stake in the company.
The deal values STW’s business at around $512m, with new shares being issued to WPP at 91.5c each, 30 per cent more than their value when they went into the trading halt on Friday.
Let’s be clear, this is not a merger of equals. Mike Connaghan and the Executive Team at STW shouldn’t keep their jobs moving forward. Describing 2015 as “not good enough” by STW’s CEO sounds ok as a quote but it highlights the lack of accountability from a holding co perspective. The pressure that STW puts on co leaders is immense and ruthless and its ironic that the STW top leadership emerge unscathed from this process. Incredible when you think about how the network has underperformed under their watch.
Totally agree with @Michael.
Performance at STW has been average at best and frankly the business leadership is old-school and unsophisticated.
I can’t see MC staying around. [Edited under Mumbrella’s comment moderation policy]
so who do you want to lead it then ? an over seas person with dubious international experience ? How long did it take WPP to replace Steady .. who exactly would step in and have the influence Mike has ?
Buy Enero for loose change and there’s a built-in leader….
@Geronimo; Are you serious? There’s half a dozen Australians domestically and internationally that could do it.
Give me a break.
If your position is no one else could do it so he should stay then I’m lost for words.
A fresh set of eyes would definitely be a good thing.
One minute there is talk of “synergies”, the next “no redundancies” – hmmmmm…..
Mike will hang around to oversee the “merger” and “unlock synergies” then eventually “leave” to “pursue new opportunities” or “enjoy more time with family”.
Win win? What nonsense. There is rarely a merger of equals, rather a victor and victims. And the victims are the staff, followed by the clients.
If there are to be no job losses why not guarantee staff their jobs with a contract?
No? Thought not.
If you are not one to f the favoured few, and they know who they are, polish your resume, and dust off your life jacket.
What influence? Mike makes an appearance at shareholders meetings, and rarely sticks his head up in between appointments. An industry leader you think? He doesn’t have the profile of a Sorrell or a Levy and closer to home the likes of Atlassian and Xero are far more endearing companies from an innovation/tech leadership perspective.
Meanwhile, someone still has to be held accountable to the Asia expansion strategy that was so ill conceived.
This deal is long overdue and irrespective of who leads it short term (housekeeping chores have to be completed) the changes will come thick and fast in 2016.
Those agencies that were previous split in their allegiance between WPP and STW stakeholders will benefit the most. Namely Mindshare, Ogilvy & JWT who aren’t nearly as successful locally as their international namesakes. I’d expect a refresh, secondments on key accounts and a renewed focus on the product.
As for the various smaller outfits they’ll be merged / rebranded and you’ll most definitely see a roll out or expansion of WPP brands that can capitalise on existing global relationships and roster.
is Hamish McLennan free?
@fleshpeddler no, but $2 will get him.
No. He costs about $8 million a year
I suggest it won’t be long into 2016 until Sir Martin’ bean counters fly in and cut loose on the current Management team. As for Mr McLennan, he’s Lachlan’s boy and wherever he appears next it will be linked in some way to the Evil Corp regime.
Buckman