Predator or Prey Dilemma Faces APN With French Offer on Table

(Bloomberg) -- APN Outdoor Ltd., long looking for opportunities to expand, now faces a crucial junction: buy a local Australian rival or accept a takeover offer by one of the world’s biggest outdoor advertising firms.

France’s JCDecaux SA yesterday made an unsolicited all-cash A$1.1 billion ($811 million) bid for the Sydney-based operator of advertising billboards across Australia and New Zealand. APN today rose as much as 15 percent to A$6.70, above the A$6.52 a share offer.

The offer by JCDecaux doesn’t take into account APN’s A$500 million bid last month for local outdoor advertising firm Adshel, owned by HT&E Ltd. Analysts say antitrust regulators would have concerns should all three companies merge.

“It is unlikely that the competition regulator would allow a combination of all three companies,” Citi analysts led by David Kaynes wrote in note dated June 20. HT&E “will be reluctant to part with Adshel unless they can sell it for a significant premium.”

Predator or Prey Dilemma Faces APN With French Offer on Table

The action comes after the Australian Competition and Consumer Commission last year warned that a tie-up between APN Outdoor and Australian advertising company Ooh!Media Ltd. would likely result in a lessening of competition, leading to the merger being scrapped.

“A combination of APN and JCDecaux’s Australian assets is likely to be less of a problem for the ACCC than the combination of Ooh!Media and APO given the relative lack of crossover in asset ownership and operating segments,” Ord Minnett analysts wrote in June 21 note.

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