By Colin Kruger
Shares in outdoor advertising group QMS Media surged more than 23 per cent on Tuesday after confirmation that private equity group Quadrant had made a cash bid valuing it at more than $420 million.
The QMS board has said it will back the $1.22 a share bid, plus a 1.3c final dividend, in the absence of a superior offer and subject to an independent expert concluding that the deal is in the best interests of shareholders.
QMS services include in-venue advertising at sports venues, as well as large format digital billboards. Credit: Alamy
Shares which had been trading at 90c last week - before takeover speculation emerged - rose 23.5 per cent to $1.235 on Tuesday.
"Having fully considered a range of strategic alternatives in relation to some or all parts of the QMS business, including the receipt of an unsolicited proposal from Quadrant, the board believes this offer allows QMS shareholders to realise significant value for their shares," said QMS chairman Wayne Stevenson.
QMS listed on the ASX in 2015 at 65c a share as an outdoor advertising business but has also developed a digital sports marketing business, QMS Sport, which sells advertising at sports stadiums on behalf of clubs like A-League side Western United.
QMS founder and chief executive Barclay Nettlefold said the Quadrant offer was a "testament to our sustained growth in a challenging market, and our continued market leading digital revenue contribution".
Mr Nettlefold, and QMS executive John O’Neill, will not be selling their shares to Quadrant if the bid succeeds. They will retain a combined stake of 14.8 per cent in the business.
The scheme of arrangement is subject to conditions which includes Foreign Investment Review Board (FIRB) approval. QMS said it expected to announce a timetable for the deal next month. If approved by shareholders the deal is expected to settle in the first quarter of 2020.