Outdoor ad giant JCDecaux has made a play for fellow out-of-home media company APN Outdoor, offering a whopping $1.1 billion for the company overnight.
The initial offer was submitted as an unsolicited non-binding proposal to acquire 100 per cent of APN Outdoor, with the help of Goldman Sachs as JCDecaux’s advisor.
Speaking on the move, JCDecaux co-chief executive Jean-François Decaux said, “JCDecaux has a strong and longstanding history in Australia, having entered the market with the Sydney street furniture contract before the Olympic Games in 2000 with state of the art products especially designed for Australia to both enhance the streetscape and provide an essential public service.
“The proposed transaction will see the combination of two complementary, premium portfolios in the outdoor advertising space.
“JCDecaux is committed to expanding its operations in Australia through organic and inorganic investment and believes the proposed transaction provides an attractive proposal for APN Outdoor shareholders at a price implying a premium EBITDA multiple to sector benchmarks.”
In a response to the bid, APN published an ASX statement this morning, acknowledging it had received an “unsolicited, non-binding and conditional acquisition proposal from JCDecaux SA (JCD) to acquire 100 per cent”.
Adding that the JCD Proposal is subject to a significant number of conditions.
These include “granting of exclusivity for a period of six weeks for JCD to undertake due diligence”, “implementation of the acquisition via a scheme of arrangement”, “negotiation and execution of a scheme implementation deed” and “a requirement that the APO Board agrees unanimously to recommend that shareholders vote in favour of the proposed scheme in the absence of a superior proposal”.
As well as this, APN Outdoor said JCDecaux would need “a requirement that APO does not proceed to acquire Adshel”, and “a receipt of regulatory approvals including approvals from Australia’s Foreign Investment Review Board and the Australian Competition & Consumer Commission.”
The move, while surprising, follows a spate of industry consolidation and attempted acquisitions by outdoor media owners.
Specifically, APN Outdoor’s recent attempt to bid for fellow outdoor company Adshel parent company Here, There & Everywhere (HT&E).
After receiving oOh!media’s revised offer of $470 million for Adshel, parent company Here, There & Everywhere (HTE) said in a statement to shareholders last month that it had received another offer, and that oOh!media’s wasn’t the “most attractive” one on the table.
“HT&E had offered to engage with [oOh!media] to enable it to more appropriately value Adshel so as to improve their price, including by providing further due diligence financial information subject to execution of a confidentiality agreement and on a non-executive basis,” the statement read.
At the exact same time, APN Outdoor released a statement on the ASX saying that it was, in fact, the company that had submitted an offer for Adshel, which it confirmed this morning was worth $500 million.
“Adshel’s street furniture business would provide an attractive compliment to [APN Outdoor]’s existing out-of-home product offering,” the statement read.
“At this early stage, no agreement has been reached between the parties and there is no certainty that the proposal will result in any transaction.”