A consortium made up of Alibaba, Tencent and China Media Capital (CMC) is in talks to buy a stake worth about 20 percent in WPP China, Sky News reported. The deal, which is at an early stage and could still take months, is expected to value the business at USD 2-2.5 billion.
Under the agreement, WPP would create a new holding company for its Chinese agency operations. The consortium would then acquire roughly equal shareholdings in the new company, with WPP Group retaining majority ownership and control. Roberto Quarta, WPP's chairman, is understood to have travelled to China this month with Andrew Scott, one of its co-chief operating officers, to continue talks about the prospective deal.
WPP is looking for a successor to CEO Martin Sorrell, who stepped down in April following an investigation into his personal conduct. WPP is expected to name a successor in the comping months. Mark Read, the other co-chief operating officer, has made it clear that he would be interested in the job. WPP is also assessing external candidates.
The company has announced only one disposal since Sorrell’s departure, an USD 340 million stake sale in Globant, a marketing software developer. WPP is also selling an USD 300 million share in AppNexus to AT&T. Other assets, including a stake in Vice, the youth media platform, are also likely to be sold. Kantar, WPP's market research division, has been the subject of interest from private equity firms, although the sale of that could complicate any transaction involving its Chinese operations.
