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March 18, 2015

WPP to grow its data with Dunnhumby bid

Advertising company WPP is expected to buy a percentage of the data analytics firm.

By James Nunns

Tesco’s data and analytics firm, Dunnhumby, has roused interest from advertising firm WPP who is reportedly set to make a bid for the data firm.

Plans to sell the firm behind Tesco‘s clubcard had been announced in January, with WPP now confirming that it will be bidding for the company.

Sir Martin Sorrell confirmed the intention at the Deloitte Media and Telecoms conference. Sorrell said that it is important for manufacturers to have the best data on what their customers are doing.

WPP’s history suggests that it will not buy the company outright, as a number of deals for percentage stakes in companies appear to highlight the ad firms tactic to not own firms outright.

Sorrell said at WPP’s fourth quarter earnings call: "We are not big plonkers. We don’t plonk down large amounts of cash to 100% acquire particularly public companies with limitations on how earn-outs can be structured and of course, on people."

"If you look at these technology companies, a very significant amount of the costs each year are share substitutes. Share-based compensation plays a very big important part, and paying 100% upfront for a company does leave you particularly vulnerable in the big tech area."

Dunnhumby has been valued at £2bn.

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