Southern Cross Austereo (SCA) and oOh!media have pulled the pin on the idea of merging the OOH business with the radio network.
As first reported on AFR, there were talks of a nil-premium merger of the two businesses, which would see Triple M and The Hit Network combine with oOh!’s large OOH advertising portfolio.
However, according to the AFR, the deal is not going ahead at this stage.
oOh!’s share price has been under particular strain, which industry players believe could have led to the merger talks.
In August this year, the guidance provided was between $125 million to $135 million, which sent the OOH player’s shares spiralling down 30 per cent.
However, oOh! last week upgraded its profit forecast of between $138 million and $143 million after a surge in billboard bookings. The upgrade saw oOh!’s share price rise 24 per cent last Wednesday.
Furthermore, just two weeks ago oOh! media was forced to dispel rumours that its CEO Brendon Cook had been involved in a management buyout discussion with Macquarie capital, with the exec suggesting the murmurings were “without any basis in fact”.
A struggling market
Across the board, mergers and acquisitions have been rife this year, underpinning a tough advertising market for all.
While the OOH industry has generally remained the most stable of all mediums, the merger talks suggest no one is immune to tough market conditions.
And, while the merger would have certainly benefited oOh!, there’s no denying it could have been advantageous for SCA too, with news breaking last week that the radio network culled up to 90 jobs across the company following a difficult year.
According to SMI, the market was set to bounce back into positive territory in October and enjoy a strong bounce in ad spend. However, SMI released new data earlier this month revealing the market has remained weak in October, with data showing total agency bookings back 8.5 per cent this month.
All major media reported lower bookings, although outdoor bookings were impacted by an extra loading period in September which inflated that month’s agency ad spend and artificially reduced the October bookings.