UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 6-K
____________________
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the Month of August 2024
Commission File Number: 001-38303
______________________
WPP plc
(Translation of registrant's name into English)
________________________
Sea Containers, 18 Upper Ground
London, United Kingdom SE1 9GL
(Address of principal executive offices)
_________________________
Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:
Form
20-F X Form 40-F
___
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1): ___
Note: Regulation S-T Rule 101(b)(1) only permits the
submission in paper of a Form 6-K if submitted solely to provide an
attached annual report to security holders.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7): ___
Note: Regulation S-T Rule 101(b)(7) only permits the
submission in paper of a Form 6-K if submitted to furnish a report
or other document that the registrant foreign private issuer must
furnish and make public under the laws of the jurisdiction in which
the registrant is incorporated, domiciled or legally organized (the
registrant’s “home country”), or under the rules
of the home country exchange on which the registrant’s
securities are traded, as long as the report or other document is
not a press release, is not required to be and has not been
distributed to the registrant’s security holders, and, if
discussing a material event, has already been the subject of a Form
6-K submission or other Commission filing on EDGAR.
Forward-Looking Statements
In
connection with the provisions of the U.S. Private Securities
Litigation Reform Act of 1995 (the ‘Reform Act’), the
Company may include forward-looking statements (as defined in the
Reform Act) in oral or written public statements issued by or on
behalf of the Company. These forward-looking statements may
include, among other things, plans, objectives, beliefs,
intentions, strategies, projections and anticipated future economic
performance based on assumptions and the like that are subject to
risks and uncertainties. These statements can be identified by the
fact that they do not relate strictly to historical or current
facts. They use words such as ‘aim’,
‘anticipate’, ‘believe’,
‘estimate’, ‘expect’,
‘forecast’, ‘guidance’,
‘intend’, ‘may’, ‘will’,
‘should’, ‘potential’,
‘possible’, ‘predict’,
‘project’, ‘plan’, ‘target’,
and other words and similar references to future periods but are
not the exclusive means of identifying such statements. As such,
all forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances that are beyond the
control of the Company. Actual results or outcomes may differ
materially from those discussed or implied in the forward-looking
statements. Therefore, you should not rely on such forward-looking
statements, which speak only as of the date they are made, as a
prediction of actual results or otherwise. Important factors which
may cause actual results to differ include but are not limited to:
the impact of epidemics or pandemics including restrictions on
businesses, social activities and travel; the unanticipated loss of
a material client or key personnel; delays or reductions in client
advertising budgets; shifts in industry rates of compensation;
regulatory compliance costs or litigation; changes in competitive
factors in the industries in which we operate and demand for our
products and services; changes in client advertising, marketing and
corporate communications requirements; our inability to realise the
future anticipated benefits of acquisitions; failure to realise our
assumptions regarding goodwill and indefinite lived intangible
assets; natural disasters or acts of terrorism; the Company’s
ability to attract new clients; the economic and geopolitical
impact of the conflicts in Ukraine and Gaza; the risk of global
economic downturn; slower growth, increasing interest rates and
high and sustained inflation; supply chain issues affecting the
distribution of our clients' products; technological changes and
risks to the security of IT and operational infrastructure,
systems, data and information resulting from increased threat of
cyber and other attacks; effectively managing the risks, challenges
and efficiencies presented by using Artificial Intelligence (AI)
and Generative AI technologies and partnerships in our business;
risks related to our environmental, social and governance goals and
initiatives, including impacts from regulators and other
stakeholders, and the impact of factors outside of our control on
such goals and initiatives; the Company’s exposure to changes
in the values of other major currencies (because a substantial
portion of its revenues are derived and costs incurred outside of
the UK); and the overall level of economic activity in the
Company’s major markets (which varies depending on, among
other things, regional, national and international political and
economic conditions and government regulations in the world’s
advertising markets). In addition, you should consider the risks
described in Item 3D, captioned “Risk Factors,” which
could also cause actual results to differ from forward-looking
information. In light of these and other uncertainties, the
forward-looking statements included in this document should not be
regarded as a representation by the Company that the
Company’s plans and objectives will be achieved. Neither the
Company, nor any of its directors, officers or employees, provides
any representation, assurance or guarantee that the occurrence of
any events anticipated, expressed or implied in any forward-looking
statements will actually occur. The Company undertakes no
obligation to update or revise any such forward-looking statements,
whether as a result of new information, future events or
otherwise.
EXHIBIT INDEX
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Exhibit
No.
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Description
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1
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WPP to sell its majority stake in FGS Global dated
07 August 2024, prepared by WPP
plc.
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FOR IMMEDIATE RELEASE
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7 August 2024
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WPP plc ("WPP" or the "Group")
WPP to sell its majority stake in FGS Global at an Enterprise Value
of $1.7bn, unlocking significant value for its
shareholders
WPP plc (LSE/NYSE: WPP) today announces it has entered into an
agreement to sell its entire majority stake in leading strategic
communications and advisory firm, FGS Global ("FGS" or the "Firm"),
to Kite Bidco Inc., an entity controlled by investment funds
managed or advised by Kohlberg Kravis Roberts & Co. L.P.
("KKR") (the "Transaction"). KKR first made a minority investment
in the Firm in July 2023.
The Transaction accelerates the value realisation for WPP from its
strategic advisory businesses. This strategy started with the
merger of Finsbury, The Glover Park Group and Hering Schuppener in
2021, the subsequent acquisition of Sard Verbinnen in 2021 and the
introduction of KKR as a minority shareholder in 2023. Through
these transactions, FGS has become a global leader in providing
advice to the stakeholder economy with over 1,400 experts and over
1,600 clients.
This Transaction better positions WPP to focus on and invest in its
world-class creative, media and corporate and consumer public
relations businesses to deliver growth while strengthening the
Group's balance sheet.
The consideration for the sale of WPP's c.50% stake at an
Enterprise Value of $1.7bn (c.£1.3bn1)
is $775m (£611m) ($707m (£557m) after tax) payable in
cash at completion2.
This represents an attractive valuation multiple to the 2023
EBITDA.
The total cash proceeds payable on completion of $767m
(£604m)3 will
be used to reduce WPP's leverage, implying pro-forma average net
debt to EBITDA of c.1.60x4.
WPP aims to continue to manage its debt within the targeted range
of 1.5-1.75x average net debt to EBITDA, enabling it to invest in
the growth of its businesses, pay dividends and return surplus
capital to investors over time. The Transaction has no impact on
WPP's current year or medium-term guidance and is expected to be
broadly earnings neutral in 2025.
The Transaction is expected to close before the end of 2024,
subject to regulatory approvals and other customary closing
conditions. The
Transaction is a related party transaction, falling within UK
Listing Rule 8.2.1R, due to KKR's existing c.28% shareholding in
FGS. The board of WPP (the "Board"), which has been so advised by
Goldman Sachs International, acting in its capacity as sponsor,
considers that the terms of the Transaction are fair and reasonable
as far as WPP shareholders are concerned. In giving its advice,
Goldman Sachs International has taken account of the Board's
commercial assessment of the Transaction. The Board considers the
Transaction to be in the best interests of WPP shareholders as a
whole.
Mark Read, CEO of WPP, said: "The sale of FGS represents an
excellent outcome for WPP. Together with the management of FGS we
have built a world-leading strategic communications and advisory
group, creating considerable value for all stakeholders. We have
achieved an attractive price, enabling WPP to accelerate the
crystallisation of the significant value created. This also
provides WPP with greater financial and management flexibility as
we continue to grow our core business including Burson and Ogilvy
Public Relations which give our clients access to world-class
public relations services."
Alexander Geiser, Global CEO of FGS, added, "Over the past four
years, we have built one of the world's leading strategic
communications and advisory businesses from three independent
consultancies and the addition of Sard Verbinnen. I would like to
thank WPP for their help and long-standing collaboration in growing
our firm. We are thrilled by the continued support of KKR, who also
share our vision and strategy to be the
leading advisor helping clients navigate the increasingly complex
stakeholder economy. KKR's exceptional investment
track record, extensive experience and global resources will be
invaluable as we further grow our integrated solutions globally as
a standalone firm."
Philipp Freise, Partner and Co-Head of European Private Equity at
KKR, stated: "Our investment in FGS reflects our strong commitment
to strategic partnerships, where we provide long-term capital and
global resources to entrepreneurial teams and world-class
businesses. We strongly believe in FGS's strategy and leadership
and have been pleased with our partnership since our minority
investment in July 2023. In today's increasingly complex
stakeholder ecosystems, the value of FGS's insight, advice and
execution is increasingly essential for organizations to navigate
uncertainty and achieve their goals. We look forward to continuing
our collaboration and helping FGS realize their vision as a global
category leader."
1 $ enterprise value and
consideration translated into £ at an exchange rate of
£1:$1.27
2 Assuming
a 30 November 2024 completion date; exact proceeds will vary
slightly with completion date
3 Comprising
£557m consideration (after tax) for WPP's c.50% stake as well
as a net £47m inflow for the repayment of a loan made by WPP
to FGS, less FGS's cash on balance sheet
4 Pro-forma
average adjusted net debt to headline EBITDA (last 12 months)
(including depreciation of right-of-use assets) of c.1.60x, versus
WPP's average adjusted net debt to headline EBITDA (last 12 months)
(including depreciation of right-of-use assets) of c.1.84x at 30
June 2024. Calculated by reducing WPP's average adjusted net debt
over the last twelve months by the expected cash proceeds after tax
of c.£604m and reducing headline EBITDA by FGS's headline
EBITDA contribution.
About WPP:
WPP is the creative transformation company. We use the power of
creativity to build better futures for our people, planet, clients
and communities. For more information, visit
www.wpp.com.
About FGS:
FGS Global is the world's leading strategic communications and
advisory firm, with approximately 1,400 professionals around the
world, advising clients in navigating complex stakeholder
situations and reputational challenges. FGS Global was formed from
the combination of Finsbury, The Glover Park Group, Hering
Schuppener and Sard Verbinnen & Co to offer board-level and
c-suite counsel in all aspects of strategic communications -
including corporate reputation, crisis management and government
affairs - and is also the leading force in financial communications
worldwide.
FGS Global offers seamless and integrated support with offices in
the following locations: Abu Dhabi, Amsterdam, Beijing, Berlin,
Boston, Brussels, Calgary, Chicago, Dubai, Dublin, Düsseldorf,
Frankfurt, Hong Kong, Houston, Kingston, London, Los Angeles,
Munich, Paris, Riyadh, San Francisco, Shanghai, Singapore, Tokyo,
Toronto, Washington, D.C., South Florida, Vancouver and Zurich. The
firm is headquartered in New York.
In 2023, FGS generated $465m (£374m) of net sales, $90m
(£72m) headline EBITDA (including
depreciation of right-of-use assets) and $87m (£70m) headline
operating profit, which WPP fully consolidated given its
controlling stake.
About KKR:
KKR is a leading global investment firm that offers alternative
asset management as well as capital markets and insurance
solutions. KKR aims to generate attractive investment returns by
following a patient and disciplined investment approach, employing
world-class people and supporting growth in its portfolio companies
and communities. KKR sponsors investment funds that invest in
private equity, credit and real assets and has strategic partners
that manage hedge funds. KKR's insurance subsidiaries offer
retirement, life and reinsurance products under the management of
Global Atlantic Financial Group. References to KKR's investments
may include the activities of its sponsored funds and insurance
subsidiaries. For additional information about KKR & Co. Inc.
(NYSE: KKR), please visit KKR's website at www.kkr.com and on X
@KKR_Co.
Contacts:
Investors and analysts
Tom Waldron +44 7788 695 864
Anthony Hamilton +44 7464 532 903
Caitlin Holt +44 7392 280 178
irteam@wpp.com
wpp.com/investors
Media
Chris Wade +44 20 7282 4600
press@wpp.com
Richard Oldworth +44 7710 130 634
Buchanan Communications +44 20 7466 5000
Goldman Sachs International (+44 20 7774 1000) is acting as sole
financial adviser to WPP on the Transaction.
Disclaimer
Goldman Sachs International, which is authorised by the Prudential
Regulation Authority ("PRA") and regulated by the Financial Conduct
Authority and the PRA in the United Kingdom, is acting exclusively
for WPP and no one else in connection with the Transaction and will
not be responsible to anyone other than WPP for providing the
protections afforded to clients of Goldman Sachs International, or
for providing advice in connection with the Transaction or any
other the matters referred to in this announcement.
Cautionary statement regarding forward-looking
statements
This announcement contains statements that are, or may be deemed to
be, "forward-looking statements". Forward-looking statements give
the Company's current expectations or forecasts of future
events.
These forward-looking statements may include, among other things,
plans, objectives, beliefs, intentions, strategies, projections and
anticipated future economic performance based on assumptions and
the like that are subject to risks and uncertainties. These
statements can be identified by the fact that they do not relate
strictly to historical or current facts. They use words such as
'aim', 'anticipate', 'believe', 'estimate', 'expect', 'forecast',
'guidance', 'intend', 'may', 'will', 'should', 'potential',
'possible', 'predict', 'project', 'plan', 'target', and other words
and similar references to future periods but are not the exclusive
means of identifying such statements. As such, all forward-looking
statements involve risk and uncertainty because they relate to
future events and circumstances that are beyond the control of the
Company. Actual results or outcomes may differ materially from
those discussed or implied in the forward-looking statements.
Therefore, you should not rely on such forward-looking statements,
which speak only as of the date they are made, as a prediction of
actual results or otherwise. Important factors which may cause
actual results to differ include but are not limited to: the impact
of epidemics or pandemics including restrictions on businesses,
social activities and travel; the unanticipated loss of a material
client or key personnel; delays or reductions in client advertising
budgets; shifts in industry rates of compensation; regulatory
compliance costs or litigation; changes in competitive factors in
the industries in which we operate and demand for our products and
services; changes in client advertising, marketing and corporate
communications requirements; our inability to realise the future
anticipated benefits of acquisitions; failure to realise our
assumptions regarding goodwill and indefinite lived intangible
assets; natural disasters or acts of terrorism; the Company's
ability to attract new clients; the economic and geopolitical
impact of the conflicts in Ukraine and Gaza; the risk of global
economic downturn; slower growth, increasing interest rates and
high and sustained inflation; supply chain issues affecting the
distribution of our clients' products; technological changes and
risks to the security of IT and operational infrastructure,
systems, data and information resulting from increased threat of
cyber and other attacks; effectively managing the risks, challenges
and efficiencies presented by using Artificial Intelligence (AI)
and Generative AI technologies and partnerships in our business;
the Company's exposure to changes in the values of other major
currencies (because a substantial portion of its revenues are
derived and costs incurred outside of the UK); and the overall
level of economic activity in the Company's major markets (which
varies depending on, among other things, regional, national and
international political and economic conditions and government
regulations in the world's advertising markets). In addition, you
should consider the risks described in Item 3D, captioned 'Risk
Factors' in the Group's Annual Report on Form 20-F for 2023, which
could also cause actual results to differ from forward-looking
information. Neither the Company, nor any of its directors,
officers or employees, provides any representation, assurance or
guarantee that the occurrence of any events anticipated, expressed
or implied in any forward-looking statements will actually occur.
Accordingly, no assurance can be given that any particular
expectation will be met and investors are cautioned not to place
undue reliance on the forward-looking statements.
Other than in accordance with its legal or regulatory obligations
(including under the Market Abuse Regulation, the UK Listing Rules
and the Disclosure and Transparency Rules of the Financial Conduct
Authority), the Company undertakes no obligation to update or
revise any such forward-looking statements, whether as a result of
new information, future events or otherwise.
Any forward looking statements made by or on behalf of the Group
speak only as of the date they are made and are based upon the
knowledge and information available to the Directors at the
time.
No statement in this announcement is intended as a profit forecast
or estimate for any period and no statement in this announcement
should be interpreted to mean that earnings, earnings per share or
income, cash flow from operations or free cash flow for WPP or the
WPP group post-transaction for the current or future financial
years would necessarily match or exceed the historical published
earnings, earnings per share or income, cash flow from operations
or free cash flow for WPP.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
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WPP
PLC
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(Registrant)
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Date:
07 August 2024
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By:
______________________
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Balbir
Kelly-Bisla
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Company
Secretary
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