APN ups Adshel bid to $540m as OOH bidding war escalates

Out-of-home advertising market acquisition frenzy continues

The bidding war across Australia’s out-of-home supplier market continues, with APN Outdoor Group today upping its bid for rival player, Adshel, to $540 million.

Just a day after JCDecaux lodged a $1.09 billion bid for APN dependent on it abandoning the Adshel purchase, the ASX-listed company announced it would now offer $540 million to acquire 100 per cent ownership of Adshel, currently owned by HT&E. The figure is a $40m increase on APN’s previous bid for Adshel, lodged on 22 May.

It’s not the first acquisition offer Adshel has received this year. OOh!Media kicked off the acquisitions frenzy with a $470 million offer for Adshel in April, which was subsequently rejected by HT&E. Adshel operates about 15,000 outdoor touchpoints nationally.

In a statement to the ASX today, APN said the purchase of Adshel represented an important strategic expansion for the business, adding between $48 - $50 million annual EBITDA and pre-tax cost synergies of about $15 million per annual phased in over 18 months.

“The acquisition of Adshel would increase diversification across APN Outdoor’s out-of-home formats and provide a new platform for growth,” the company stated.

“Upon completion of the proposed acquisition, APN outdoor would become a more diverse out-of-home media group combining its billboard and transit platforms with Adshel’s street furniture assets in Australia and New Zealand. APN Outdoor would expect to benefit from an increased audience reach and a diversified asset base across a number of out-of-home formats.”

APN CEO and MD, James Warbuton, said Adshel was an important step in finding long-term, sustainable growth.

“There is an opportunity for us to use our expertise in large-scale digital developments to support the rollout of digital across Adshel’s street furniture format, particularly in Australia,” he commented. “We expect this would enable us to bring digital to a broader range of advertisers and complement our existing product offering to those advertisers.”

JCDecaux’s unsolicited bid for APN, lodged yesterday, offers APN shareholders $6.52 per share, or a total of $1.088bn, and is conditioning on APN not pursuing its Adshel acquisition.

The digitisation of the OOH sector and growing focus on verification and reporting capabilities has triggered a sort of renaissance across the advertising channel in recent years. Net media revenue in the sector for 2017 increased 6 per cent to $837 million, according to Outdoor Media Association figures, with 47.3 per cent attributed to digital OOH. It also claims OOH audiences have grown by 23 per cent since 2010, with such advertising reaching 93 per cent of Australian consumers.

Meanwhile, JCDecaux has unveiled a fresh partnership with ANZ and media agency, PHD, that sees its digital panels at bus, train and tramstops in Sydney, Brisbane and Melbourne displaying real-time timetable information for those specific stops with an accompanying promotion for ANZ's mobile app.


For example, one ad features the headline: 'The next tram is due in XX minutes. Use that time to get on top of your money with the new ANZ App.' Data is being sourced from public government databases, while the campaign is being delivered via JCDecaux's Smartframe digital network.

“Partnering with JCDecaux, this data-led out-of-home campaign aims to leverage dwell time on public transport routes encouraging people to ‘get on top of their money’ by downloading the ANZ App. It’s testament to the great work we do with ANZ and we thank them for allowing us to do new and innovative work,” PHD Group business director on ANZ, Jordan Smith, said.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu 

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