A battle between WPP and Sir Martin Sorrell’s new agency, S4, to acquire Dutch digital production company MediaMonks is turning ugly, with WPP threatening to withdraw share awards from Sorrell’s exit payoff if he goes ahead with the purchase.

Speaking at Cannes about the potential competition between WPP and his new agency S4, he called S4 a “peanut”. “But I have to admit that some people have peanut allergies.”

According to Sky News, WPP has written to Sorrell via its lawyers, Slaughter & May, alleging that he is “likely to be in breach of his confidentiality obligations” and would forfeit outstanding share awards if he went ahead with the bid.

READ: This industry body is out to tackle gender stereotyping in ads but why now?

MediaMonks is based in Amsterdam and has 11 offices globally, including Shanghai, Los Angeles, London and Sao Paulo. Its most recent office opened in Mexico earlier this year. The company specializes in high tech digital production, including virtual reality, with recent projects including customized dresses created using digital fashion data for H&M and a virtual reality experience in Oslo for Audi that won an award at the recent Webbys.

A spokeswoman for MediaMonks, which is run by co-founders Wesley ter Haar and Victor Knaap, would only say: “They’re flattered to be mentioned in this context and it’s a testament to the work MediaMonks’ team is doing. Beyond that, they never comment on speculation.”

READ: What the TBWA Facebook Foundry means for the agency of the future

However, one source, who preferred not to be named, says: “It’s no surprise as MediaMonks is working in exactly the kind of technologies Sorrell’s been talking about. Plus, MediaMonks is a rapidly expanding company, a real Dutch success story.”