After many months of speculation, negotiations and uncertainty it’s official now. WPP Group has agreed to increase its share holding in India’s largest advertising agency, HTA from 60 per cent to 74 per cent.
exchange4media has come to know through industry sources that WPP has offered to pay between Rs 8000 to Rs 9000/- for each equity share valued at Rs 10. It is speculated that the deal will be through within two months time.
In a private circular given to the share holders (read employees), EmStock Holdings Limited, which currently holds 40 per cent share of HTA has asked for their approval to go ahead with the deal.
WPP will acquire 14 per cent shares in HTA after the amalgamation of EmStock with HTA. The amalgamation would be on the basis of a 1:1 swap ratio between HTA and EmStock shares. The appointed date for the purpose of amalgamation will be 1st July 2001.
After the amalgamation of EmStock shares with HTA, each employee will be eligible to sell approximately 35 per cent of their share holding in HTA to WPP.
exchange4media has estimated that the shareholders would be paid to the tune of Rs 40 thousand to Rs 2 crore depending upon the number of shares they hold.
Once the deal is over, it is speculated that there’s going to be a major reshuffle in the top management and the company may also offer its staff an attractive VRS package.
As you will be aware that HTA has yet to give its staff increments this year. The deal with WPP and speculation of hefty interim dividend has managed to divert the attention of staff from the issue for the time being. We at exchange4media will try bringing you the latest developments as and when it happens. Watch out for this space for more.