Connect with us

Media

Ex-CEO’s ‘Unlawful’ Attempt to Acquire MediaMonks Generates Exchange of Letters Between Lawyers

Notes concern confidentiality agreements

Published

on

Ex-CEO’s ‘Unlawful’ Attempt to Acquire MediaMonks Generates Exchange of Letters Between Lawyers
Page Views: 226

The spat between WPP and former CEO Martin Sorrell over the future ownership of digital production company MediaMonks quickly escalated into a potential legal battle this week.

The Guardian first reported late Thursday that the holding group Sorrell ran for 33 years sent a letter to his London-based law firm, Lewis Silkin, arguing that any attempt to acquire the Amsterdam-based network would violate the confidentiality agreement Sorrell signed when he left the company in April.

WPP spokespeople declined to comment today.

A source close to Sorrell, however, confirmed the existence of the letter, which was sent to Sorrell personally rather than to his new company, S4 Capital.

The letter read, in part: “WPP regards any attempt by S4 Capital to acquire MediaMonks to amount to an unlawful diversion of a maturing business opportunity from WPP.”

The source also said Lewis Silkin has already responded with its own letter challenging the claims made in the earlier note.

WPP did not confirm the receipt of the second letter, but a source with knowledge of the company’s approach to the case said it would not change the board’s position that Sorrell is violating his confidentiality agreement by pursuing the acquisition.

According to The Guardian’s reports, WPP’s key argument holds that Sorrell used intelligence gathered while he was still CEO to guide his decision about MediaMonks. This fact amounts to a violation of the agreement that prohibits Sorrell from sharing any confidential information related to WPP and could therefore render him ineligible for some or all of the more than $26 million in future payments the company still owes as part of his five-year incentive plan, according to the reports.

Two sources confirmed to Adweek that the holding company had indeed considered acquiring MediaMonks in the summer of 2017, when Sorrell was still CEO. The fact that WPP did not move ahead with the plan at that time, one source argued, renders its current argument moot since Sorrell and his new business now operate independently even though he remains a significant WPP shareholder.

The latest tit for tat would seem to confirm multiple reports that WPP and Sorrell are, in fact, simultaneously competing to bid for MediaMonks. A spokesperson for MediaMonks has not responded to a request for comment.

Credit: Adweek

Advertisement
 

Trending