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Japanese advertising agency Asatsu-DK rose as much as 5.2 per cent on Tuesday following reports that WPP had agreed to sell its stake in the company to Bain Capital clearing the way for the private equity firm’s $1.3bn tender offer.
WPP, which owns a 24.7 per cent stake in ADK, originally said it did not intend to sell at the ¥3,660 price offered by Bain in early October, which it said “significantly undervalues” ADK. The UK-listed ad giant in November launched legal proceedings against its Japanese partner for the way it was attempting to break the 20-year relationship.
Sources close to the Boston-based private equity firm said it was close to signing an agreement with WPP and it is understood the deal will be signed in the next couple of hours.
London-based Silchester International, which holds a 17.3 per cent stake in ADK, previously said the Bain offer “substantially undervalues” ADK and said the Japanese ad company’s management had not looked hard enough for alternative buyers.
People close to Bain said the private equity firm will now extend the terms of the tender offer again following WPP’s decision.
ADK shares were up 4.7 per cent in afternoon trading in Tokyo.