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S4 Capital has acknowledged receiving a proposal from MSQ Partners for a potential merger, following media speculation over the weekend about the London-listed digital advertising group's link to the US private equity-backed agency network.

The company released a statement on Monday indicating that discussions are "at a very preliminary stage" and emphasised that "no certainty that a transaction will be forthcoming."

Founded by ex-WPP boss Sir Martin Sorrell in 2018, S4 Capital clarified that any potential deal would involve S4 acquiring MSQ, not a takeover of S4 by MSQ, thus no Rule 9 waiver under the º£½ÇÊÓƵ's Takeover Code would be expected, as reported by .

Additionally, S4 pointed out that this announcement was made "without the prior agreement or approval of MSQ."

S4 Capital's private equity interest

MSQ is predominantly owned by American investment firm One Equity Partners, which took over the creative and technology agency group in 2023.

Sky News reported on Saturday that One Equity had initiated talks with Sorrell about merging the two entities, with S4 also attracting interest from other suitors, including New Mountain Capital.

This development is part of a series of approaches towards S4 Capital, which last year reportedly turned down advances from Stagwell, led by Mark Penn, as well as from other private equity investors.

Speculation is rife following a tough spell for S4, which has grappled with macroeconomic turbulence and accounting hiccups, causing its share price to plummet nearly 60 per cent in the past year, and more than 90 per cent below its 2022 peak. The stock wrapped up at 21.2p on Friday, pegging the business's value at around £140m.