JCDecaux to buy billboard specialist APN Outdoor

US$831mil deal is largest for French firm in almost two decades

SYDNEY: JCDecaux SA has clinched a deal to buy billboard specialist APN Outdoor Group Ltd for A$1.12bil (US$831mil) to rival its top Australian competitor, the largest acquisition for the French company in almost two decades.

The world’s biggest outdoor advertiser won unanimous support from APN’s board after sweetening its offer to A$6.70 a share in cash, according to a statement.

That’s 2.8% above JCDecaux’s previous unsolicited offer and 4.7% higher than APN’s last closing price of A$6.40.

APN’s billboards would complement JCDecaux’s Australian business, which is focused on street furniture such as bus stops, helping the French company challenge the country’s biggest outdoor advertiser, Ooh!media Ltd.

The proposed acquisition, which would be JCDecaux’s largest since it went public in 2001, comes as industry consolidation in Australia heats up after Ooh!media this week outbid APN for outdoor advertiser Adshel.

The combined JCDecaux and APN businesses would have about 35% of the Australian market, roughly in line with Ooh!Media, Liberum analysts Annick Maas and Ian Whiitaker wrote in a note.

That’s under the 40% regulatory threshold in the country and is therefore expected to be approved, the analysts wrote.

“We view this deal as positive for the company as JCDecaux tends to get better yields in more consolidated markets and the deal should be largely accretive,” Maas and Whittaker wrote.

JCDecaux, which has more than 1 million advertising panels in over 80 countries, gained 1% to 29.14 at 9:10am in Paris yesterday. APN climbed 0.3% to A$6.42 in Sydney.

The acquisition is subject to shareholder and regulatory approvals.

APN’s board has proposed a special divi- dend of as much as 30 Australian cents a share that if paid out, would be taken out of JCDecaux’s offer.

APN shareholders will be entitled to an interim dividend of as much as 7 Australian cents a share regardless of whether the deal goes through or not.

The proposal implies an enterprise value that’s 12.9 times projected earnings before interest, taxes, depreciation and amortisation.

The deal is subject to approvals from the Australian Competition and Consumer Commission, the Australian Foreign Investment Review Board and the New Zealand Overseas required.

APN investors will vote on the deal at a court-convened shareholder meeting and the acquisition is expected to be completed in the fourth quarter of 2018.

APN expects to update the market on a timetable next month. Allens, Cadence Advisory and Morgan Stanley advised APN.

APN tried to merge with Ooh!media last year but gave up after the Australian industry regulator warned the deal would lessen competition in the out-of-home advertising market. — Bloomberg Investment Office if