Talks on as oOh!media seeks to boost cash

OOh!media or its representatives were believed to be holding talks with Quadrant Private Equity on Friday as the advertising company explores ways to boost its cash levels.

The billboard owner and operator is working with adviser Macquarie Capital, which is understood to be considering a capital raising or a merger with rival QMS, now owned by Quadrant, for its client.

Some estimate that oOh!media could be seeking about $100m or $200m through the equity markets, but all options are said to be currently on the table.

There was talk in the market on Friday that the planned equity raising was likely to involve a placement, so it would be interesting to see if Quadrant acquires a stake in the business.

However, some say a merger between QMS and oOh! Media without asset sales could face opposition from the Australian Competition and Consumer Commission.

Shares in oOh!media have fallen to 84c and its market value $203.6m.

The company said it remained in a trading halt while it considered a capital raising.

It has net debt of $354.5m as at December, which equates to 2.6 times its underlying earnings before interest, tax, depreciation and amortisation.

The company faces a challenging advertising market in the months ahead amid the coronavirus pandemic, and after companies stepped back from advertising spending last year.

Its shares have fallen from around $3.92 in December.

Other companies have been making efforts to raise capital.

Carbon Revolution secured equity but at a discount of about 40 per cent while Webjet has been trying to tap the market and remains in a trading halt.

Speculation is mounting that Webjet’s efforts to tap the market through Goldman Sachs have so far been unsuccessful.