OOh!media declares it has ‘no liquidity issue’, amid takeover talk

Billboard firm oOh!media denies it has balance sheet problems, amid a trading halt, crashing share price and talks on a capital raising.

OOh!media CEO Brendan Cook denies the billboard ad company is facing a liquidity issue as it calls a trading halt amid a crashing share price and talk of a private equity takeover through rival QMS.

OOh!media on Friday became the latest Australian media company to issue a market update, announcing a trading halt of 48 hours in order to meet with shareholders and lenders to discuss a capital raising, as it faces a challenging period because of the coronavirus pandemic.

Shares in the outdoor advertiser and owner of Junkee Media have fallen to 84c in the coronavirus sell-off from $3.92 in December. It now has a market cap of just $203.6m.

The company said it remained in a trading halt while it considered a capital raising, with oOh!media holding net debt of $354.5m as at December, which equates to 2.6 times its EBITDA.

Mr Cook told The Australian “there is not a liquidity issue”.

“We’re in a strong position financially great support of our banks, CBA, Westpac, NAB and others. It’s not a balance sheet issue, what we wanted to do given the share prices was to take the chance to talk to our shareholders.

“We have very strong and long institutional investor base and we’ll have a chat to them, get their opinions and then make some decisions. We see ourselves in a position where we certainly have the financial capacity today to get through any corona challenges.

“But what we want to do is say, can we come out at the end of it even stronger, and be in a, you know, strong position to take advantage of any market changes while in very healthy business.”

The Australian’s DataRoom reported that oOh!media was working with adviser Macquarie Capital, which is understood to be considering a capital raising or a merger with rival QMS, now owned by private equity 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, leading to the possibility of Quadrant acquiring a stake in the business.

However Mr Cook told The Australian today “there is no truth to the Quadrant rumour”.

Asked directly whether oOh!media was in talks with potential buyers Mr Cook replied: “No, we haven’t had any discussions.”

Mr Cook was due to step down from the role this year but a replacement is yet to be named and he told The Australian he will see through the job to steer through the COVID-19 crisis.

“This has intervened and I’m here as long as required to get ....the business through the whole thing and keep it going in the direction we should be going. I’m a very supportive shareholder, very invested shareholder and want to make sure that we, the business will continue to grow.”