A New York hedge fund has doubled Sir Martin Sorrell’s S4 Capital advertising group, which lost nearly a third of its market value this week following a delay in publishing its financial results.
Permian Investment Partners this week raised its stake in S4 to 4.1%, betting that concerns about the rejection will turn out to be baseless.
Alex Duran, co-founder and portfolio manager of Fermian, said his firm has “immense confidence” in Sir Martin’s “operational and financial management and control of the business” and S4 chief executive Scott Spirit.
He added that Fermian “studied closely” Sir Martin’s record at WPP, the world’s largest advertising group he founded and led for more than three decades.
Analysts have Raised concerns On the lack of any clarification on the part of S4 as to what caused the delay in its results, when one of them said that the company was silent “in a strange and worrying way”.
Duran downplayed these concerns. “I do not think they can say much, so they did not say,” he said. He added that this was not Fermian’s first investment in the advertising group, although its previous holding fell below the 3 per cent threshold leading to exposure.
The deal helped raise the price of the S4 share by just over 11% to 321p at closing on Friday, a slight recovery due to a fall that erased about £ 1 billion from the market value of the London-based trading company.
S4’s troubles began on Wednesday when it announced that PwC, its auditor, Could not complete The “work needed” for the company to move forward with a planned release of its initial full year results the next morning. He added that the 2021 results are still expected to “remain within market expectations”.
S4 declined to comment. The company, which appointed a new CFO in January, blamed the first delay on its March results in an epidemic affecting “travel and resource allocation.”
Premian was founded in 2008 by Brahman Capital alumni, New York Investment Manager. Duran said Fermian’s mission was to invest in “the best CEOs in the world, especially in Europe”.
Sir Martin Launched the S4 in 2018 after a sudden departure from WPP. During four years of trading, the group quickly acquired 29 companies, and built a workforce of 7,500 workers in 33 countries.
Living up to criticism for running WPP from a lean corporate center and not paying enough attention to integrating its expansive assets, Sir Martin promised a different and unique approach in his “New Age” S4 venture.
The digital-only business was built around Media Monks, a digital manufacturing arm, and Mighty Hive, which made its name as a marketer of Google’s automated ad platforms.
However, the damage to the S4 due to its delayed audit may raise longer-term challenges for Sir Martin. Since most of S4’s transactions were funded by the company that issued the shares, instead of a cash payment, a continuing decline in its share price could complicate further acquisitions.
Another report by Adrian Kelsa
Martin Sorrell’s S4 boosted after US hedge fund raises stake Source link Martin Sorrell’s S4 boosted after US hedge fund raises stake