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Originally posted on Mumbrella
Australia’s largest outdoor player, Ooh Media, has won the bidding war for Here, There & Everywhere’s (HT&E) outdoor street furniture business, Adshel, agreeing to pay $570 million.
The figure is a 21% increase on Ooh Media’s first bid of $470 million, and $30 million higher than rival APN Outdoor’s bid of $540 million.
Adshel recently secured the seven-year Metro Trains Melbourne contract, celebrating the launch with media agency partners on Thursday night while APN Outdoor and Ooh Media were still locked in a bidding war for the company.
A few months earlier, however, Adshel lost its portion of the Yarra Trams contract, which moved back to its main rival in the street furniture space, JC Decaux.
JC Decaux itself has also entered the outdoor bidding war, offering $1.1 billion for APN Outdoor last week. JC Decaux’s bid was contingent on APN Outdoor not proceeding with its proposed acquisition of Adshel.
JC Decaux had previously told Mumbrella that it wouldn’t pursue any acquisitions until it had re-secured the lucrative City of Sydney contract, which was put up for grabs late last year after two decades with JC Decaux.
Mumbrella understands the outcome of the battle for the City of Sydney contract is not yet known.
It’s also understood APN Outdoor still believes JC Decaux’s $1.1 billion bid remains too low, but the two companies remain locked in discussions this weekend, hoping to get their deal across the line in time for a Monday morning announcement.
On Friday afternoon, APN Outdoor’s share price closed at $6.40 with a market capitalisation of $1.07 billion. Ooh Media closed at $5.35 with a market capitalisation of $882.38 million, while HT&E closed at $2.46 per share, with its market capitalisation at $759.92 million.
Timeline of the outdoor industry’s almost-mergers
Ooh Media’s successful bid for Adshel comes after a busy 18 months for the out-of-home industry, with proposed mergers flying in every direction.
In late December 2016, APN Outdoor and Ooh Media – Australia’s two largest out-of-home advertising companies – announced their intentions to merge.
At the time, the companies explained the motivation behind the decision was to create a “long-term and diversified asset base across classic, digital and online formats”.
The announcement came six months after Ooh media had bought 85% of youth-orientated publisher Junkee Media for $11.05m.
Despite Ooh Media CEO Brendon Cook’s confidence the merger would be approved – based on the belief that the outdoor market makes up just 2.5% of media spend and thus the consolidation would not represent a significant decline in overall market competition – the merger was ultimately cancelled in May last year after the Australian Competition and Consumer Commission indicated it would intervene on competition grounds.
The boss of the ACCC, Rod Simms, then hit out at Cook, claiming he had failed to understand the concerns of the outdoor company’s clients in light of the merger proposal.
“We had tremendous feedback from his customers and the customers of APN about their concerns about the merger. So it wasn’t just our view there’s not strong substitutability between outdoor media and other media sections, it was also the view of many customers and we could not see evidence that there was strong substitutability between, say, advertising out-of-home and advertising on Facebook.”
Around the same time, APN News & Media – which until now owned outdoor street furniture company Adshel as well as digital publisher Conversant Media and radio company Australian Radio Network (ARN) – decided to clear up market confusion and rebranded to Here There & Everywhere, or HT&E.
With HT&E rebranded, and the Ooh Media and APN Outdoor merger scuppered by the watchdog, new potential partnerships emerged.
In April of this year, HT&E (formerly APN News & Media) revealed it had rejected a bid from Ooh Media to buy Adshel. The proposed bid’s value was not disclosed.
Weeks later, however, Ooh Media upped the bid to nearly half a billion dollars.
HT&E then revealed Ooh Media was not the only bidder at the table for Adshel.
That night, it became clear APN Outdoor was the other bidder, upping Ooh Media’s $470 million offer for Adshel to $500 million, in the first major move from newly-installed CEO James Warbuton.
APN Outdoor then continued to up its offer, bidding $540 million for Adshel yesterday morning, however was ultimately unsuccessful against Ooh Media.
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