S4 Capital Confirms ‘Merger’ Discussions With MSQ Partners

Sir Martin Sorrell’s S4 Capital has confirmed rumours that a merger is on the cards with ad agency group MSQ.

Merger or, rather, acquisition. S4 confirmed that it was a “very preliminary stage” in the discussions with MSQ Partners about a “possible combination” between the companies. That combination, if agreed, would be structured as an acquisition of S4 by MSQ.

“These discussions are at a very preliminary stage and there can be no certainty that a transaction will be forthcoming,” S4 said in a statement, issued after Sky News reported on Saturday that the company had received “a number” of approaches.

The Financial Times reported that S4 Capital’s shares were up 4.7 per cent in early afternoon trading after S4 confirmed the deal was in discussions. However, they are still down nearly a third year-to-date.

MSQ is part-owned by US-based private equity firm One Equity Partners.

In March last year, the Wall Street Journal reported that Sir Martin had declined offers from Stagwell. New Mountain Capital, another American private equity firm, was also said at the time to have held talks about buying parts or all of S4.

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