Sorrell set for comeback with new advertising venture
ReutersSir Martin Sorrell is set for a return to the London stock market just weeks after leaving advertising giant WPP.
He is taking charge of a shell company, Derriston Capital, which will become a new advertising venture, S4 Capital.
Sir Martin, 73, the driving force behind 33 years of dealmaking at WPP, stepped down in April after the board investigated claims of misconduct.
He said S4 Capital aimed to build a "multi-national communication services business".
"There are significant opportunities for development in technology, data and content. I look forward to making this happen," added Sir Martin, who will be executive chairman of S4 Capital.
After he left WPP, Sir Martin said he was in no hurry to retire from business and spoke of creating a "next generation" advertising group.
Derriston was a cash shell company listed on the London Stock Exchange in 2016 to acquire healthcare businesses.
It did not complete any deals in the sector and more recently had asked shareholders for permission to look for investment opportunities in other areas.
S4 Capital was set up recently by Sir Martin and has already raised £51m, with Sir Martin contributing £40m.
Institutional investors including Lombard Odier, Miton, RIT Capital Partners, Schroders and Toscafund have added a further £11m.
The reverse takeover deal with Derriston is a quick way for S4 Capital to get a stock market listing. It still needs the approval of Derriston shareholders.
S4 Capital's strategy is to "build a multi-national communication services business, initially by acquisitions".
In a statement, it said it had received indications from some other institutional investors that they would, "in principle", be willing to provide more than £150m of further equity funding "to support S4 Capital's acquisition plans".
Sir Martin, who was the highest paid chief executive of a FTSE 100 company and also the longest-serving, once said he would "carry on until they carry me out of the glue factory".
His decision to acquire Derriston has echoes of his reverse takeover of a small listed firm, Wire and Plastics Products, in 1985.
That shopping baskets manufacturer was turned into WPP, and became the world's biggest advertising company with revenues of over £15bn.
'Less heavy'
However, WPP's fortunes have suffered recently and the share price has fallen in the wake of a downturn in business and the rise of social media giants.
He told a conference in New York recently that advertising agencies needed to become "more agile, more responsive, less layered, less bureaucratic, less heavy".
Sir Martin left WPP after allegations of misconduct and misuse of company money, although the findings of an internal report into the matter were never disclosed.
He has always strongly denied any wrongdoing.
At the time he stood down, Sir Martin said WPP had been his passion, but it was in "the best interests of the business" to resign.
His contract at WPP did not have a non-compete clause.