This morning, oOh!Media has received a takeover bid in the order of $750 million from Pacific Equity Partners (PEP) but the outdoor player doesn’t appear to be thrilled with how the bid values the company.
PEP’s offer of $1.40 per share represents represents an implied earnings multiplier of 5.9-times.
In CY25, oOh! delivered total revenue growth of 9 per cent year-on-year to $691 million.
oOh! currently trades with a $447.5 million market cap, or 85¢ per share.
However, when Nine completed its purchase of outdoor rival QMS only a few weeks ago, it paid a multiple of 8.1-times.
When PEP began its overture to oOh!’s shareholders, it reportedly found a base willing to listen at that price. But the board isn’t convinced. The proposed deal would also take oOh! off the ASX.
It has also been reported that oOh!’s advisors have sought to paint PEP’s bid as opportunistically timed.
That isn’t surprising given its share price is down 35 per cent this year. It’s also in the midst of a chair transition and CEO James Taylor has been in the hot seat for less than five months.
In a statement to the ASX, oOh! said it was “considering and evaluating the Proposal and will update shareholders in due course. There is no certainty that the Proposal will result in a binding offer or that any transaction will eventuate. The oOh! Board recommends that shareholders take no action in relation to the Proposal at this time.”
B&T understands there is a feeling among some at oOh! that PEP’s bid simply doesn’t reflect the premium it should be paying for the business as a takeover.
Despite its recent relative hardships, including the loss of the Auckland street furniture contract which amounted to around 4 per cent of its revenue, oOh! remains the country’s largest outdoor business.
QMS, by contrast, grew its share from around 10 to 15 per cent of the outdoor market prior to its acquisition by Nine. In its annual report, oOh! said it controlled 35 per cent of the market.
Earlier this month, it emerged that oOh! would close its retail media business reo by the end of the financial year.
There’s more—perhaps far more—to follow, we expect.
