Significant hurdles remain to deal for WPP, says BofA

BofA analyst Adrien de Saint Hilaire notes that The Times and AdAge reported that Havas, a WPP (WPP) competitor, along with private equity firm’s Apollo (APO) and KKR (KKR), have explored bids for WPP or parts of its business. However, while the firm could see potential merits of any WPP-Havas combination and past deals suggest a premium to WPP’s current multiple could be possible, the firm thinks “significant hurdles remain.” The firm, which adds that PE involvement and a break-up seem like “less plausible options,” maintains an Underperform rating given what it views as WPP’s “deep, prolonged turnaround and the need for a materially stronger balance sheet.”