WPP share price: Ad giant and Providence in talks on Chime takeover

on Jul 30, 2015
Updated: Oct 21, 2019

WPP Plc (LON:WPP) is in advanced talks over a deal for London-listed sports marketing specialist Chime Communications, it has been revealed. According to recent reports in the media, the UK advertising giant and US buyout group Providence Equity Partners are mulling making an offer for Chime that could be worth more than £350 million.

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Yesterday Chime issued a statement, in which it confirmed the speculation, saying that it was in advanced discussions with WPP and Providence Equity Partners regarding a potential cash offer of 365p per share, plus an interim dividend for the current year of 2.53 pence per share. However, the company cautioned that “there can be no certainty” that WPP and Providence would proceed to make an offer.

Chime shares have soared nearly 27 percent following the announcement to 348.00p. This puts the company’s market capitalisation at £350.3 million
WPP already owns about 20 percent of Chime and plans to retain the stake, without putting in any new money. The advertising firm plans to work closely with Providence to expand Chime after taking the company private, The Financial Times notes in its report on the matter. The FT quoted Investec analyst Steve Liechti, who said that the proposed takeover price “looks reasonable in our view versus current market levels and peer multiples”.
Chime has 56 agencies including VCCP in advertising and Open Health in healthcare communications. In recent years the company has embarked on an expansion drive in sports marketing.
In today’s trading, WPP shares were up 0.6 percent at 1,474.00p, as of 13:17 BST. The stock has risen 9.6 percent since the start of the year.
The 28 analysts offering 12 month price targets for WPP have a median target of 1,670p, with a high estimate of 2,035p and a low estimate of 1,180p.
As of 14:48 BST, Thursday, 30 July, WPP PLC ORD 10P share price is 1,468.50p.


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