oOh!media says it is moving at “pace” as it engages with multiple parties interested in a potential takeover of the outdoor media company, while maintaining that its preferred model is to remain independent.
Outgoing chair Tony Faure addressed the takeover interest during the company’s AGM, after oOh!media rejected bids from I Squared Capital and Pacific Equity Partners.
I Squared Capital offered $1.45 a share, above Pacific Equity Partners’ $1.40 bid, but oOh!media said neither proposal reflects the company’s “intrinsic value”.
oOh!media backs the independent model
Asked about Nine’s acquisition of QMS and the potential for revenue synergies at the AGM, outgoing chair Faure said oOh!media still believes out-of-home businesses perform best when they stand alone.
Faure added that there is a clear winner; “If you look historically at the performance of out-of-home companies, standalone or as part of broader media groups, it’s fairly clear that the ones that stand alone perform better,” Faure said.
“So we welcome the fact that Nine understood the value of out-of-home and wants to add that to what it’s doing. But we would prefer to remain an independent operator.”
James Taylor
oOh!media Managing Director and CEO James Taylor added that Nine’s publicly identified synergies were cost-based, rather than revenue-based.
“The synergies Nine identified were cost synergies. I don’t think they put a number on the revenue synergies, which isn’t to say they don’t exist, but they’ve certainly not valued them publicly,” Taylor said.
As previously reported by Mediaweek, Nine Entertainment completed its $850 million acquisition of QMS Media, bringing the outdoor media company into the group and extending Nine’s advertising offering across streaming, broadcast, publishing and out-of-home.
Taylor said oOh!media remains confident in the independent model.
“As we look around the world, and as I’ve said before, we cannot find a single example anywhere in the world of an out-of-home business being integrated into a more traditional media business.”
Board says offers fall short
Faure said oOh!media is engaging with other parties regarding a potential change of control transaction.
“The board, together with our advisers, has considered and unanimously determined that they do not adequately reflect the intrinsic value of oOh!.
“However, we are prepared to engage with all parties to assess whether any proposal may emerge that is capable of being recommended by the board.”
Faure said oOh!media will provide limited due diligence access to parties as it assesses whether revised proposals could be recommended by the board.
“We are committed to moving at pace as we evaluate the offers, with a firm focus on achieving the best outcome for shareholders.”
Taylor on valuation and growth
Taylor said oOh!media needs to keep telling a stronger story about its growth drivers and the broader opportunity in out-of-home.
“I think, perhaps in the case of oOh!, we need to continue to tell a good story about the growth drivers in the business.
“The growth opportunity for oOh! and out-of-home is not just linked to the demise of linear television, although that is certainly one of the foundational drivers of growth.”
Taylor said measurability and ease of buying are central to the company’s next phase.
The takeover interest has lifted oOh!media’s share price, with the stock trading up another 4% at $1.355. That values the company at about $687 million.