WPP plc, the world's biggest advertising company based in the UK, has moved to take full control of its Australian subsidiary, WPP AUNZ.
Minority shareholders are being offered $0.55 a share. They last traded at $0.41.
WPP currently has 61.5% of the ASX-listed WPP AUNZ.
Taking full control means that the company can be de-listed from the ASX and won't have to lodge its financials.
WPP says its believes its proposal represents a "compelling proposition" with a fixed cash payment rather than remaining exposed to a fluctuating share price and uncertainty over future dividends in the current "challenging" operating environment.
Andrew Scott, COO of WPP, wrote to the WPP AUNZ board: "WPP AUNZ has a portfolio of leading brands in the Australasian region but we remain cautious of the environment and agree with the sentiment of WPP AUNZ CEO Jens Monsees regarding the current level of economic uncertainty in the regions in whichWPP AUNZ operates and we are mindful of the weak trading conditions currently impacting WPP AUNZ.
"As a 61.5% majority shareholder and a partner in many of WPP AUNZ's businesses, we remain committed to WPP AUNZ, however, our ability to deploy resources and assist the business is limited by the current shareholding structure. We believe that we are best able to support WPP AUNZ in maximising its potential by moving to 100% ownership."
The independent directors of WPP AUNZ are considering the proposal.
"Shareholders are advised to take no action in relation to WPP plc's proposal until they receive the independent directors' formal recommendation," they say.
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