WPP ups stake in STW Communications
Sir Martin Sorrell’s WPP has picked up more shares in struggling STW Communications as rumours of a takeover bid from the world’s largest agency holding group continue to swirl.
A posting to the Australian Securities Exchange today showed WPP’s investment vehicle Cavendish Square Holdings has bought another 10 million shares taking its stake in the company to 23.65 per cent.
STW (ASX:SGN) controls agencies including Ikon Communications, Ogilvy, Tongue, The Brand Agency as well as J Walter Thompson and Mindshare which it jointly owns with WPP.Rumours of a takeover from WPP started swirling at the start of the year as it upped its stake in the group despite a disastrous 2014 on the stock market.
STW, which is Australia’s largest agency holding company, has struggled in recent times with its share price dropping from $1.21 last October to 70c today. In October 2013 it traded at $1.60.
At today’s price STW has a market capitalisation of around $317m, while WPP has a market capitalisation in excess of $30bn.
In June STW CEO Mike Connaghan outlined his plan to revive the fortunes of the company amid what he described as a bad run in new business wins from many of its larger agencies, which included chopping its number of brands from 80 to 50.
That followed from the decision to move the Moon Communications and Shift brands under the Ikon banner to create what it hoped would be a more competitive full-service agency offering.
It has also created a new bespoke full-service agency called Sibling to service the Westfield account.
If they could win a pitch they might actually turn things around.
But they’re coming second in pretty much everything.
#freshblood needed
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never met an agency head that didn’t report that they came second after losing a pitch
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Seriously guys, first fix what y’ got.
KFC ads have set the standard for mediochre or “tradesmen like” .At least since the account left Leo Burnetts (Child Inside, Reading Cards).
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Seriously guys, first fix what you’ve got.
When clients are looking for a new agency, they don’t listen to all your promises and pitch bullshit. They look at the ads you’ve done. The work you’ve got through.
The last engaging FKC ads were when the account was at Leo Burnetts (Child Inside, Reading Cards.) How could it be that in all that time not one ad has is memorable?
I’m guessing there might be the big agency culture of cripling fear that happens on accounts too big to lose. Look at the photo of Connaghan – would you want to front up to this guy ?
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God being old and confused sucks. Rushdie have nap now.
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@Rushdie. ‘Child Inside’??? You mean ‘inner-child’ and that was for McDonalds not KFC. And let’s face it, the Macca’s work hasn’t been much good since then either.
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