oOh!media Wins Battle For Adshel
Get More Commentary, Discussion & Market Information On -
oOh!media has won a convoluted bidding war to snap up outdoor ad rival, Adshel, owned by Here, There & Everywhere’s for $570 million, beating rival suitor APN Outdoor whose future remained uncertain last night.
oOh!media initially offered $470 million for Adshel in April but the bid was rejected by HT&E and APN Outdoor subsequently made a $500 million offer last week.
APN increased its offer to $540 million also last week - as APN itself became the subject of a $1.1 billion offer from French advertising giant JCDecaux JCD).
But, on Monday, oOh!Media upped its offer for Adshel to $570 million and won the day.
The acquisition, which still needs ACCC approval, will be funded by new debt and a $329.9 million equity capital raising.
Around 72 million new oO!media shares are expected to be issued, representing about 44 per cent of its current issued capital, at $4.60 a share.
The stock is in a trading halt because of the capital raising. It closed on Friday at $5.35, giving it a market capitalisation of $882.4 million.
APN Outdoor shares didn’t trade yesterday after the company asked for a trading halt until tomorrow. The shares last traded at $6.40.
There are market rumours APN is preparing tp accept the highly conditional offer from JCD, or start talks on the deal.
oOh!media chief executive Brendon Cook said in a statement yesterday that Adshel will complement its existing portfolio of 12,000 classic and 8,000 digital signs across roadside, retail, airport, office towers, cafes and bars. Adshel has a portfolio of more than 21,000 posters and 800 screens across Australia and New Zealand.
“The digitisation opportunity in the Adshel business is expected to provide a significant avenue for further growth beyond what has been achieved to date," Mr Cook said on Monday.
The company anticipates cost synergies of between $15 million to $18 million by 2020.
oO!media also reaffirmed its annual underlying earnings guidance of $94 million to $99 million, up between 4.3% to 9.9% on the previous year, and capital guidance of $30-$40 million.
The ACCC will determine if these deals get up.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.