Channel Nine is keen to buy either APN Outdoor or oOh! Media if they fail to go public, saying the outdoor businesses would ‘struggle on their own’.
Nine chief financial officer and chief operating officer Simon Kelly says outdoor advertising is a resilient business through economic cycles and would complement the broadcaster’s existing portfolio.
“I think those businesses will struggle on their own as independent businesses because they will have challenges form other media players who are able to use the benefits of multiple channels to drive greater revenue share at their expense,” he told the Australian Financial Review.
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Kelly believes combining outdoor with Nine’s TV and live entertainment assets could drive share gains across the businesses, and cross-sell advertising across a range of platforms – and extract more revenue than public investors.
The comments come as APN Outdoor talks up a potential $500m IPO this year, with private equity owners of both it and oOh! Media expected to test the market before considering buyout offers.
However, The Australian reports that according to Kelly there have been no discussions and that Nine shareholders ‘have no appetite’ for print.
“From everything we can tell, they want very full prices for those assets. They’re good assets, but good assets don’t come cheap unfortunately,” he says.
It seems Nine is interested and still in the running, but only at the right price which the private equity companies may not be willing to accept.
“The challenge is they are both very good businesses with strong growth outlooks and private equity owners who can see their potential, and who therefore are looking for healthy, premium prices,” he told the AFR.
“Are they worth those premiums? If they deliver the upside in the future they absolutely are. But obviously you don’t like paying away upfront for the future potential.”
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