QMS Media Limited has entered into a Heads of Agreement (HOA) for a proposed merger of its New Zealand business (QMS NZ) with New Zealand independent radio, TV and digital business MediaWorks. 

The merger would make the combined businesses the biggest media company in New Zealand.

According to QMS, the transaction is subject to agreeing on final binding terms as well as several customary conditions and is expected to complete in the second quarter of CY 2019.

The proposed merger would see QMS merge its NZ out-of-home, digital media and production businesses into MediaWorks and in return will receive a material but not controlling share of the company in the expanded MediaWorks business, with funds managed by Oaktree Capital Management, L.P retaining a majority.

According to the press release announcing the HOA, “The proposed merger of QMS NZ and MediaWorks would create the largest multi-media group in New Zealand, a first in this market to realise the combined power of out-of-home, radio, TV and digital as an unrivalled destination for advertisers to build brands and maximise audience reach.”

QMS Media Limited chairman Wayne Stevenson said: “New Zealand is important to our business and we are excited about the potential opportunity to create a leading multi-media group that will transform the New Zealand advertising industry.”

Meanwhile, MediaWorks chairman Jack Matthews added: “Under Michael Anderson’s leadership MediaWorks has made great strides over the past two years.

“With this proposed merger, MediaWorks will be able to further enhance its ability to deliver high-quality local content and more effective advertising solutions to our customers.

“It will represent a significant investment in and commitment to New Zealand.”

QMS is being advised on this transaction by CLSA and Chapman Tripp.

On a local level, rumours have been circulating since early September Val Morgan will soon acquire QMS.

However, Val Morgan Group CEO Dan Hill told B&T in September: “That’s not the case.

“I assume the speculation in the industry is based on what was written in newspaper articles, but its simply not the case.

“People like to speculate and the next discussion is what else could consolidate. Naturally, people are looking at outdoor operators – probably others as well, not just us.

Hill added: “We’re not in the market to sell or combine.”

According to industry sources, QMS has been fattening itself up for a sale for some time.

QMS has declined to comment on the rumours.