S4 Capital Shares Jump After Confirming Preliminary Merger Talks With MSQ Partners

S4 Capital (LON:SFOR) surged more than 9% to 23.25p in early Monday trading after the digital advertising group confirmed it is in early discussions with MSQ Partners over a potential merger.

The company said it had received a proposal from MSQ, which is majority owned by One Equity Partners, regarding “a possible combination” between the two groups. 

S4 said the talks were at “a very preliminary stage” and stressed there was “no certainty that a transaction will be forthcoming.”

If agreed, the deal would be structured as an acquisition of MSQ by S4 Capital, rather than a takeover of S4 by MSQ under the U.K. Takeover Code. 

S4 added that it did not expect that a Rule 9 waiver would be required for the combination.

The announcement was made “without the prior agreement or approval of MSQ,” the company noted. 

Despite Monday’s rally, S4 shares remain down 29.7% year-to-date and have declined 53% over the past 12 months. 

The stock has been in a prolonged decline since late 2021 amid profit warnings, delayed results, and weak investor sentiment toward the advertising sector.

According to data compiled by TradingView, five out of seven analysts have a “Hold” rating on the stock, while two have a “Buy” rating. The consensus price target is 40.40p, suggesting a potential 73% upside from current levels.