WPP faces takeover interest as FTSE 100 exit looms

WPP, Britain’s advertising heavyweight, is drawing significant takeover speculation following a difficult year that threatens its place in the FTSE 100. French rival Havas, led by the Bolloré family, is among those considering potential moves, with discussions reportedly taking place around the possibility of acquiring WPP or building a substantial stake. Private equity firms Apollo and KKR have also reportedly assessed WPP’s assets in recent months, while hedge funds have amassed an 8.5 percent short position in the company’s shares, signalling expectations of further decline.

WPP’s market value has plummeted to approximately £3 billion, a dramatic reduction from its £24 billion peak in 2017. A drop from the FTSE 100 would not only mark a symbolic fall from grace; it could also force tracker funds to withdraw investments, compounding the company’s difficulties. While no formal bids have materialised, sources indicate that Havas may target WPP’s media buying division, WPP Media, or seek influence by acquiring a sizeable stake and pursuing a board seat. Havas has declined to comment regarding ongoing speculation.

WPP’s troubles have coincided with broader challenges to the advertising sector, including economic headwinds and technological disruption from artificial intelligence. The company, historically the largest advertising holding group globally, has suffered a 65 percent share price fall this year alone, with losses deepening to 27 percent since the appointment of new chief executive Cindy Rose. Rose, who assumed the role earlier this year following Mark Read’s departure, described the firm’s recent performance as unacceptable, noting that WPP Media had lost its direction.

The consultancy McKinsey has now been tasked with conducting a strategic review of WPP’s future, a move that comes amid underperformance relative to competitors such as Publicis. The recent merger between Omnicom and IPG in the United States adds competitive pressure. Alongside strategic concerns, WPP faces legal risks, with US law firms organising a class action lawsuit alleging misleading market statements.

Set up by Sir Martin Sorrell in 1985, WPP expanded by acquiring agencies in advertising, marketing, and PR, becoming a dominant force by 2017. Leadership changes, investor dissatisfaction, and sector-wide shifts have since eroded its position. With no official comment from WPP, investors and observers alike await the outcome of the current overtures and the company’s impending strategic decisions.