jeshoots via Unsplash
oOh!media is moving at “pace” negotiating with more than the two declared private equity firms wanting to buy the outdoor media industry leader.
Tony Faure, the outgoing chair of oOh!, touched on the intense interest in the company during his address to shareholders at the AGM.
I Squared Capital has offered $1.45 a share, a bit above the $1.40 bid from Pacific Equity Partners.
The oOh! share price has taken off, currently trading up another 4% today at $1.355, with shareholders anticipating further bids to push up the value of the company.
This values the company at $687 million. Compare that to the $268 million market capitalisation of Southern Cross Media Group, with its Seven Network and radio stations.
Southern Cross reported revenue of $1.008 billion in the half year to December.
Oh!media had $691.36 million revenue for the full year to December.
Private equity is clearly sees upside in buying into the growing outdoor media sector, taking Oh!media off market and selling when the advertising market turns from its current soft and cautious mood.
And interest is rising.
“oOh! is also engaging with other parties regarding a potential change of control transaction,” Faure said.
“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.
“oOh! will provide parties with access to a limited amount of due diligence information to enable them to assess revised proposals that may be capable of the board’s recommendation.
“We are committed to moving at pace as we evaluate the offers, with a firm focus on achieving the best outcome for shareholders.
“We will update shareholders on this in due course. However, beyond this update we will not be discussing these matters further today.”
Market analysts are upbeat about the outdoor sector and see the current interest as a beginning.
“That conversation has started, not just with PEP, but also with ISQ and possibly more suitors,” said analysts Brian Han, director at Morningstar.
“While rejecting both offers, the board has effectively put up a ‘for auction’ sign for all and sundry.”
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