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Investing.com -- S4 Capital PLC (LON:SFOR) said on Monday it is in early-stage discussions to acquire marketing agency MSQ Partners, a move that sent its shares soaring.
The S4 Capital stock was up 8.5% in London trading as of 08:04 GMT.
The digital advertising group, founded in 2018 by Martin Sorrell after his departure from WPP (LON:WPP), said MSQ is majority-owned by private equity firm One Equity Partners. It said that there is no guarantee the talks will lead to a deal.
Sky News first reported the talks on Saturday.
“This should be construed as a small positive for the equity today,” Jefferies analysts led by Oliver Conroy said in a note.
S4 has been under pressure from client budget cuts linked to U.S. tariffs and a shift toward AI-led marketing, prompting the company to lower its revenue outlook in June.
Advertising groups broadly are facing greater competition as brands demand faster adaptation to new technology.
The company’s market value has plunged to about £140 million, down roughly 98% from its September 2021 peak.
A tie-up with MSQ would expand S4’s reach into finance, healthcare and consumer goods, adding to a roster of more than 250 clients including Unilever (LON:ULVR), Haleon (LON:HLN), Procter & Gamble (NYSE:PG) and Lego.
S4’s own client list features Google-parent Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN) and Meta (NASDAQ:META).
The firm last year turned down multiple merger approaches from Stagwell, the advertising group led by former Clinton adviser Mark Penn.
In June, S4 said it expects full-year like-for-like net revenue to fall by a low single-digit percentage, citing continued caution from tech clients against a backdrop of a softer global economy and U.S. tariffs.
It had previously projected 2025 revenue and core operating earnings to be broadly in line with 2024 levels.
The owner of the Monks agency reaffirmed its outlook for like-for-like core operating profit for the year.