HomeBusinessALEX BRUMMER: There's no evidence S4 would do any better in New...

ALEX BRUMMER: There’s no evidence S4 would do any better in New York

Martin Sorrell has done a good job at S4 Capital generating a thriving digital marketing agency following his acrimonious ‘good leaver’ departure from WPP in 2018.

Both agencies are real contributors to creative Britain and were built on the flexibility and liquidity offered by UK equity markets.

So it is deeply disappointing to hear Sorrell suggesting that S4, currently valued at £2.7billion, might get a better valuation in New York.

American dreams: S4 Capital founder Sir Martin Sorrell (pictured) is considering a New York listing for the company

The 25 per cent fall in S4 stock looks unjustified. But as a digital pioneer, Sorrell should recognise that S4 is not alone.

Stock in Facebook-owner Meta, one of the companies that has displaced media platforms, plummeted 26 per cent in a single day’s trading this year.

Similarly, streaming champion Netflix has taken a 25 per cent tumble as has supreme innovator Tesla. 

Indeed, the Nasdaq is down 12 per cent and the 25 per cent drop in S4 shares looks quite modest compared to the fate of The Hut Group (THG). 

Institutional investors have taken a fresh look at digital stars and rotated into more traditional stocks.

The pandemic fundamentally changed the way fast moving consumer goods giants do business. Many have recognised that they can use their own digital platforms to reach consumers and agency input is less important.

 S4 is part of a re-rating process and there is no guarantee it would do any better in New York.

There is an evident London share discount, even if it is gradually being eliminated.

Take the proposed takeover of heritage UK aerospace logistics firm John Menzies by Kuwait-based rival National Aviation Services (NAS). 

The £560million or 608p per share transaction is more than twice the quoted price for Menzies shares before NAS set siege leading to surrender by the board.

Given Menzies’s security sensitive role on the aprons of airports across the globe, there could be security concerns. 

The SNP should be none too pleased either at losing an Edinburgh-based firm so soon after Babcock warned that it might decamp from Rosyth should Scots voters decide on divorce from the UK.

It remains disappointing that it is open season for UK plc, with Clipper Logistics and Blue Prism set to depart the London Stock Exchange and the Motor Fuel Group in line to be sold by one private equity firm, Clayton, Dubilier & Rice, to another, Softbank-backed Fortress.

All the more reason why big battalion UK investors should think about the core national economic and security interest before selling the UK short.

Silent witness

Financial justice too often hits the wrong targets. Deferred Prosecution Agreements, such as that reached between the Serious Fraud Office and Tesco in 2019, see shareholders punished rather than the executives behind the swindle, and penalties levied rarely reach victims.

Last week the Competition and Markets Authority fined JD Sports and Footasylum £4.3million for collusion, but the bosses concerned didn’t have to cough up a brass farthing.

So it is refreshing to see that the Serious Fraud Office is to distribute £210,610 to three infrastructure projects in Nigeria as part of the proceeds of a fine for bribery imposed on Amec Foster Wheeler Energy (part of John Wood Group) in 2021.

This settlement sets a precedent that could usefully be adopted by the Institute of Chartered Accountants in England (ICAEW). 

It so far has refused to disgorge all, or part, of a substantial £13.5million fine imposed on KPMG and its partner David Costley-Wood over a wrongful effort to push mattress company Silentnight into insolvency. 

The aim was to avoid a buyer having to take on pension liabilities. The net result is that 1,200 pensioners face cuts of 30 per cent in their retirement income while the overpaid accountants pocket the proceeds. It is behaviour which contaminates faith in auditors after a string of scandals.


When Sky and BT paid £4.5billion for rights to screen Premier League games in 2021, it looked bonkers.

Inflation has set in and an auction for the rights to screen India’s IPL cricket has broken out among would be broadcasters. 

Potential buyers include Mukesh Ambani’s Reliance Industries, Amazon, Sony and Disney. 

They are competing for a five-year broadcast deal worth £5billion and a potential global audience of 2.5billion fans.

Quite a distance from dank, empty deckchairs at the County Ground when the sea mist descends at Hove.

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