WPP (WPP)– Media
| Price: 300p +3.9% | P/E: 6.9x |
| Market Cap: £3.1bn | Yield: 8.4% |
Shares in serial underperformer WPP popped this morning on a Sunday Times report there was bid interest from French peer Havas and private equity groups Apollo and KKR.
According to the article, the buyers could be interested in the whole business or just parts of it, but Havas, KKR and WPP have all declined to comment while Apollo told the paper it wasn’t in talks or considering a bid.
Our View
Like free-to-air broadcaster ITV (ITV), another laggard media company, WPP is a favourite takeover story, but anyone who has owned the shares this year has seen their value steadily erode month by month (on 5 November the stock hit its lowest level since 1998).
There probably is some value in the business, but earnings growth is never going to get back the same rate it was in the 2000s and 2010s because the world has moved on and that is reflected in today’s valuation.
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