APN Outdoor and Ooh!Media have scrapped the proposed merger ahead of a decision by the ACCC.
It will not go ahead as both parties view the extent of ACCC's intervention represents an “unacceptable risk to a successful merger”.
The "mutual" decision follows a preliminary delay from the ACCC in May that questioned whether the merger would "lessen" competition.
The decision was announced via a statement on the ASX this morning and cited “it is the parties view that offering the material concessions to the ACCC which are likely to be required to ultimately allow the proposed merger to proceed would adversely compromise the overall merits of the transaction”.
In an additional statement from Ooh!Media, Ooh! CEO Brendon Cook said Ooh!Media was "disappointed" and lashed out at the ACCC's intervention and its narrow view of the media market.
“We’re amazed that in this day and age, the media market could be divided into narrow segments, and we cannot fathom how anyone could suggest a merger such as this could restrict innovation – innovation is core to our business and always will be, and by its nature is not limited by funding, it’s available to anyone who makes it a core part of their strategy,” he says.
“So we don’t agree with the ACCC position, but don’t want to spend six to 12 months educating the ACCC or in court, especially as the media market is changing so quickly - hence our mutual decision.”
The proposed merger between APN Outdoor and Ooh!Media was first announced in early December of 2016, with Ooh!Media chairman Michael Anderson citing “future growth and digitisation opportunities” as reason to pursue the move.
Cook also said Ooh!Media approached the deal as a “positive move” for advertisers and agencies. Neither party will pay the other any break fee.
“Despite this decision, we remain focused on continuing to enhance the value of our innovative and established businesses and continue to deliver on and build out our clear strategy. As always, we will continue to look for opportunities that align with our new media strategy and enhance shareholder value,” he says.
Speaking on an investor call this morning, Ooh! said they were “ thoroughly disappointed” that it has come to this and that the ACCC “took a stronger view than anticipated”. (More to come from the investor call).
View the full statement below:
More details to come.
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