UPDATE: July 10, 2018: Martin Sorrell's newly-formed venture, S4 Capital, has acquired MediaMonks in a deal with an estimated value of $352 million, sources familiar with the matter told The Wall Street Journal. The acquisition ratchets up tensions and competition between Sorrell and his former employer, WPP. The agency holding giant's laywers, Slaughter & May, wrote to Sorrell's lawyers earlier this month alleging the executive was leveraging information learned during his time at WPP in a way that would potentially breach his contract and cause him to forfeit up to £20 million (or roughly $26.5 million) in share awards he has been entitled to since resigning in April, per Business Insider.  

Dive Brief:

• Ad holding group WPP and its former CEO Martin Sorrell's new venture, S4 Capital, have reportedly submitted competing bids for MediaMonks, a Netherlands-based digital creative agency, according to multiple news reports. The conflict was first reported by Sky News.
• The rival bids put Sorrell, who resigned from WPP in April, in direct competition with his former company, seemingly contradicting reports that he promised investors he wouldn't compete against the company he ran for more than 30 years. The Wall Street Journal noted this deal could put Sorrell in breach of his confidentiality agreements and threaten his sizable share award, estimated to be as high as $26 million at current exchange rates.
• Sorrell has compared his new venture to a "peanut" to highlight its size and downplay the threat S4 might pose to other, more established companies, according to The Wall Street Journal. MediaMonks is a global company with offices in 11 countries, and produces games, films and websites, often for ad agencies.

Dive Insight:

Acquiring MediaMonks would likely be a major win for S4, as the venture is reportedly not interested in investing much into traditional agencies. MediaMonks focuses more on technology and interactive content, things that Sorrell has cited having significant development opportunities for the marketing and ad industry. Ad holding companies continue to show interest in technology, data and content as they've struggled with digital disruption and new competition from smaller shops and consultancies like Accenture. Major brands have been rethinking their marketing and advertising business, with some bringing the capabilities in-house, shifting toward consultancies or reducing their agency rosters altogether.

WPP has experienced several ups and downs in recent months, and experts have speculated that the company would be broken up following Sorrell's departure. In May, American Express said it's putting its global media business up for review after 20 years with WPP's Mindshare agency. The same week, financial services giant HSBC announced that it had moved its global media business from Mindshare to Omnicom's PHD. WPP also recently announced a collaboration with Unilever and startup community Unilever Foundry aimed at helping the CPG giant drive innovation across its brands and respond to consumers' changing needs and emerging tech.

Sorrell's resignation from WPP after more than 30 years building the company followed an investigation into allegations of misuse of company assets and improper behavior, though the investigation found no material wrongdoing. He announced his new venture in May, which WPP Chairman Roberto Quarta called "a distraction," according to The Wall Street Journal.