QMS enters trading halt pending announcement to market

ASX-listed outdoor advertising company QMS has entered a trading halt pending an announcement to the market in the coming days.

Company secretary Malcolm Pearce told the ASX the halt related to mounting media speculation around a pending transaction.

QMS focuses on digital billboards

Media reports have suggested private equity could be set to snap up the independent outdoor company.

In August, QMS reported a net profit after tax of $16.5m for the first half of the 2019 calendar year, up 65% from the corresponding period last year.

Any move by QMS would be the latest shake-up in the outdoor sector, which has seen a raft of acquisitions and consolidations in recent years.

Moves and mergers in Australia’s outdoor sector 

Should QMS change hands, it would round out a busy few years for outdoor, with mergers, both proposed and successful, flying in every direction.

In late December 2016, APN Outdoor and Ooh Media – Australia’s two largest out-of-home advertising companies  at the time – 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 2017 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 Ooh’s Cook, claiming he had failed to understand the concerns of the outdoor companies’ 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 at the time also 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.

APN News & Media once also owned APN Outdoor, but it sold 100% of its shares in 2013. The cross-over in names continued to confuse the market until the rebrand occurred.

With HT&E rebranded, and the Ooh Media and APN Outdoor merger scuppered by the watchdog, new potential partnerships emerged.

In April last 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 $470m offer for Adshel to $500m, in the first major move from newly-installed CEO James Warbuton.

APN Outdoor then continued to up its offer, bidding $540m for Adshel, however was ultimately unsuccessful against Ooh Media.

Ooh Media ultimately bought Adshel for $570m.

The Adshel brand is no more

In the wake of the Ooh Media and Adshel deal, it was revealed there would be $18m in cuts as the new business found “cost synergies” from “leveraging combined infrastructure with duplicated resource rationalisation and reducing outsourcing costs”.

The Adshel brand has subsequently been retired, and become a division of Ooh Media, called Commute by Ooh.

In the wake of the deal, HT&E’s chairman Peter Cosgrove stepped down, saying the timing was right to move on from the business as the Adshel sale gives HT&E opportunities to strengthen its remaining assets.

APN Outdoor then entered a trading halt, soon after the Ooh Media and Adshel deal was made official on the ASX, pending a further announcement from the company – which was expected to be a deal with international outdoor giant JC Decaux.

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 in 2017 after two decades with JC Decaux.

In June last year, it was confirmed JC Decaux would purchase APN Outdoor for over $1bn.

APN Outdoor’s boss James Warburton then departed the business, before re-emerging as CEO of Seven West Media, replacing Tim Worner.

Former APN Outdoor boss, Warburton, is now CEO of Seven

Other outdoor players who exited the sector during the wave of consolidation have also re-appeared.

Adshel CEO Mike Tyquin left following its integration with Ooh Media, and now has a role heading up Woolworths’ media business, Cartology.

And sales director David Roddick is now at Foxtel Media (formerly MCN) as chief sales officer.


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