Billboard discontent spurs KKR’s QMS play

Growing discontent among independent operators in the billboard industry is understood to have encouraged Kohlberg Kravis Roberts to consider a rival takeover bid for outdoor advertiser QMS.

It is understood that the considerable work KKR has been embarking on for a possible bid of QMS in recent weeks involved acquiring the company, then rolling it up with other smaller billboard operators around Australia.

However, some believe Quadrant Private Equity, which rarely embarks on on-market takeovers, has its deal to buy the company at $1.22 a share, or $571.6m including debt, stitched up, with founder Barclay Nettlefold committing his shares in the group to the buyout fund should its deal get up as part of a scheme of arrangement and vowing to stick with the business once delisted.

Independent billboard owners are said to be disgruntled with the dominant players in the market, such as oOh!media and JCDecaux.

oOh!media and JCDecaux are relied upon by independents to sell their space to advertisers.

However, the displeasure stems from concerns that major players favour their own ad space over that owned by independents when it comes to placing the ads with the advertising billboards and signs.

They are eager to be part of a big operator to gain more negotiating power with their customers.

Sources say the game plan for Quadrant is to recreate its success of APN Outdoor, owning the QMS Australian outdoor advertising assets, which it floated in 2014 with a $425m market value. Last year, APN Outdoor was bought by JCDecaux for $1.217bn.

Southern Cross Media was understood to have been looking at a bid for the company at between 90c and $1.10 a share but was believed to have been rebuffed by QMS.