The move will increase the global advertising network’s shareholding from 23.6 percent to 61.5 percent, with STW due for a name change
WPP has prepared to merge its Australian and New Zealand businesses with publically-listed marketing and communications company, STW Communications Group, in both markets with the move set increase the global advertising network’s shareholding from 23.6 percent to 61.5 percent.
The merged entity should reel in pro-forma LTM and EBIT revenues in the amounts of c.A$1 billion and A$142 million (approximately £68 million) respectively. Positioned to serve as the primary vehicle for WPP in the aforementioned markets, STW will see a name change to align its interests with that of the former.
The transaction will be structured through a contribution of WPP’s Australian and New Zealand businesses into STW, for an enterprise value of A$512 million (approximately £245 million), with consideration consisting of the issue to WPP of new STW shares and a shareholder loan.
The said shares will be issued to WPP at A$0.915 per share, representing a premium of 30% to the 10-day VWAP prior to the date of announcement. It will move to become the majority shareholder with a 61.5% equity interest and also have the right to appoint a majority of directors to the STW board.
The transaction is conditional on STW shareholder approval and the approval of the Australian Competition and Consumer Commission and the Foreign Investment Review Board. Founded in, STW offers clients a comprehensive and integrated range of marketing, content and communications services.
WPP has been an investor in STW since 1998. The merger continues WPP’s strategy of investing in important geographic markets and to advance horizontality to ensure our people work together for the benefit of clients. STW Communications Group was listed in 1994.
