oOh!media (ASX:OML) shares rose on Monday after the outdoor advertising company confirmed that three major investment firms had reconfirmed their interest in buying the business.
The oOh!media share price closed 4% higher at A$1.53 on Monday, up from A$1.475 on Friday. The rise came after the company provided investors with a fresh update on its takeover process.
Pacific Equity Partners, I Squared Capital and Oaktree Capital Management have each submitted separate conditional and non-binding proposals. The proposal values oOh!media shares at no less than A$1.60 each, with the highest proposal worth A$1.65 per share.
However, investors should remember that these are not final or binding takeover offers. No deal has been agreed upon, and any of the bidders could still change their proposal or leave the process.
Who Are the Three Bidders?
Pacific Equity Partners, also known as PEP, is an Australian private markets investment firm with a strong presence in Australia and New Zealand.
I Squared Capital is a global infrastructure investment manager. Oaktree Capital Management is a large international investment firm specialising in alternative investments.
All three firms were previously given access to oOh!media’s due-diligence information. They reconfirmed their proposals on Friday, 10 July, after reviewing the company’s financial and business information.
The oOh!media board will continue discussions with all three bidders while they complete further due diligence and negotiate possible binding transaction documents. This process is expected to take up to four weeks.
Could a Bidding Contest Lift the Offer?
Having three bidders involved could create competition for oOh!media. A bidder may need to increase its price or offer better terms to secure support from the company’s board.
Media reports suggest I Squared Capital may have submitted the highest proposal. However, oOh!media has not officially revealed which bidder offered A$1.65 per share. Therefore, investors should treat reports about the leading bidder cautiously.
Why Is oOh!media Attracting Buyers?
oOh!media operates a large network of digital and traditional advertising sites across Australia and New Zealand. Its locations include roadsides, shopping centres, airports, railway stations, bus stops, office towers and universities.
These assets may appeal to investment firms because many advertising locations are difficult for competitors to replace. Digital advertising screens can also display multiple advertisements and be updated more quickly than traditional billboards.
A private owner may believe it can improve operations, control costs, and expand the company’s digital advertising network. However, none of the bidders has publicly provided a detailed plan for the business.
What Should Shareholders Watch Next?
A takeover is still not guaranteed. A deal could fail if due diligence identifies problems, a bidder does not receive investment committee approval, financing is unavailable, or the parties cannot agree on final terms.
Even if a binding agreement is signed, it may still require regulatory, court, and shareholder approvals.
For now, the oOh!media board has advised shareholders to take no action. If no proposal becomes binding, the takeover premium could disappear, and the OML share price could fall.
The next four weeks may therefore be important for oOh!media shareholders, with investors watching for a higher offer or a binding takeover agreement.
