WPP invests in Swedish internet TV outfit FlowNetwork

Advertising and media giant WPP is to buy a minority stake in Swedish over-the-top TV service FlowNetwork.FlowNetwork delivers programmes via the internet, supplying Sweden's regional newspapers such as Norrköpings tidningar, Folkbladet and Motala Vadstena Tidning with technology and content.The company is also the co-producer of new Swedish drama series, 'Gåsmamman'.Inveterate dealmaker WPP, which has been rumoured as a potential buyer of Tesco's Dunnhumby retail data arm, said the investment "continues [its] strategy of developing its integrated services in fast-growing and important markets and sectors and strengthening its capabilities including digital media".The FTSE 100 media conglomerate already employs over 800 people in Sweden, generating $180m in annual revenues.Reiterating her 'sell' recommendation, Berenberg analyst Sarah Simon said: "With M&A needed to keep pace with the marketing industry, this spend is core, not discretionary."She added that if WPP's £300m-400m in normal annual M&A spend is treated as capex, then WPP's free cash flow yield is only 3.9% and that its acquisition-led strategy was flattering to its price-earnings valuation in the low interest rate environment. The stock was down 0.8% at 1,547p in early trading on Tuesday.