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.
