The proposed merger between oOh! Media (OML) and APN Outdoor (APO) is set to be implemented in May should OML shareholders vote in favour.
The merged group will have revenues of $1.6bn, its expected to generate value accretion for both sets of shareholders, driven in part by cost synergies of at least $20m to be realised on a run-rate basis within two years following implementation of the merger.
However, the merger is contingent on the ACCC's approval, which will be handed down March 16.
APN says the proposed merger combines two complementary portfolios to create a leading, diversified out-of-home and online media group with value accretion to be shared by both companies’ shareholders.
The merged group with have an enhanced geographic presence across Australia and New Zealand with 8,989 digital and 63,200 classic screens and panels across metropolitan and regional locations.
As outlined to shareholders, the two companies propose to merge via an all scrip scheme of arrangement, with OML shareholders receiving a 0.83 APO shares for every one OML share they own. The merged group will have a pro forma market capitalisation of approximately $1.8bn.
[Related: oOh! Media to merge with APN Outdoor]
Furthermore, a $400m debt facility has been confirmed to support future growth for the merged group.
Brendan Cook, CEO, oOh! Media says, “We remain focused on progressing the merger with APN Outdoor Group. The Board of oOh! Media is in full support of the merger and recommends that shareholders vote in favour of the scheme in the absence of a superior proposal and subject to the independent expert concluding that the scheme is in the best interests of oOh!media shareholders.
"We believe the merger rationale is compelling and the combination of the businesses will create a leading Australian media group. The merger is expected to deliver value accretion including generating pre-tax cost synergies of at least $20m on a run rate basis within two years of implementation of the merger, excluding one-off transactions and integration cost.”
Once the transaction is complete shareholders will own 55 per cent of APN Outdoor and 45 per cent of oOh! Media.
oOh! CEO Brendon Cook will remain CEO and managing director of the newly merged group following completion, with four directors from both companies set to join a new eight-person board. APN CEO Richard Herring is set to depart the business following the merger after 16 years with the company. He will stay on board for 12 months as a consultant for the transaction.
oOh! Media and APN Outdoor have recently released its full year result for 2016, both showing double digit growth in revenue, 20.1 per cent and 10 per cent respectively.
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