Warburton: JC Decaux takeover of APN Outdoor is a better outcome than purchasing Adshel

The CEO of Australia’s second-largest out-of-home media player, APN Outdoor, believes being outbid by rival Ooh Media for street furniture business Adshel has led to a better outcome for his shareholders. Instead, international giant JC Decaux will now purchase APN Outdoor in a deal worth over $1bn.

Despite spruikung the benefits of the JC Decaux deal, CEO James Warburton would still not be drawn on the record about the future of the brand, or how long he will stick around.

Warburton: Proud of what he has achieved at APN Outdoor

APN Outdoor and Ooh Media entered a bidding war earlier this year for Here, There & Everywhere’s (formerly APN News & Media) Adshel, with Ooh Media emerging victorious thanks to an offer of $570m – above that of APN Outdoor’s $540m.

At the same time, international street furniture giant JC Decaux – which currently holds the lucrative City of Sydney contract – was bidding for APN Outdoor, on the condition it no longer pursued Adshel.

JC Decaux initially bid $1.1bn and was later successful for a price tag of $1.119bn.

Warburton, who came to to helm of APN Outdoor at the beginning of this year, said however, that the takeover was a better result.

“I certainly think the surety of an all-cash consideration for our shareholders and anywhere from a 20% to 35% premium on three-month and six-month VWAP [volume-weighted average price] is an outstanding result for our shareholders, and arguably a better one because of the certainty,” he told Mumbrella.

“So I think from that perspective, this ultimately probably is a better outcome than if we had bought Adshel to be completely frank.”

Yesterday, the competition watchdog, the ACCC, approved both the Ooh Media takeover of Adshel – which will see the disposal of the Adshel brand within three months – and the JC Decaux takeover of APN Outdoor.

Warburton would not be drawn to make an on-the-record comment about the future of the APN Outdoor brand, however Mumbrella understands that once the deal is completed – subject to approval too from the Foreign Investment Review Board – APN outdoor would likely cease to exist.

He was, however, keen to talk about APN Outdoor’s turnaround, and ‘awakening the sleeping giant’.

“Everyone has certainly noticed that we’ve been around, and I think we’ve done a very, very strong job as the results demonstrate. To have turned around the culture and to have achieved the results we have, and particularly the wins, we’ve set up a very, very good business. It’s a very good business for Decaux in a very short period of time. We were having a great time. We were just getting started. But obviously the outcome is that good, that you’ve got no choice but to say ‘You know what? $6.70, plus the dividend, plus, plus, plus, it’s outstanding.”

He was also reluctant to look too far into the future when talking about his future with the new entity.

“It’s too early to speculate. We’ll focus on completion, and I think obviously the results demonstrate that we’ve performed extremely well. I’ve thoroughly enjoyed running the company and running a public company, and take great pride in what we’ve delivered to our shareholders. I think it’s just too early to comment at this point,” he said.

Mumbrella understands, however, Warburton would leave the organisation once the deal is done.

The outcome of four major out-of-home players becoming two, will likely have implications for the City of Sydney contract, which JC Decaux has held for two decades.

The contract went to tender in tender last year, with the City of Sydney seeking expressions of interest on street furniture and out-of-home media services, as well as free public WiFi services.

In July, however, the City went back to the drawing board and once again called for EOIs. At the time, it denied the step back was due to the flurry of takeover bids involving the country’s largest street furniture providers.

Mumbrella understands the interested parties, including APN Outdoor, have re-presented their offerings, and the City is in the process of drawing up a shortlist.

Yesterday, APN Outdoor announced its financial results to the ASX, reporting a 13% growth in profit and 4% revenue growth for the first-half of 2018.


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