Pacific Equity Partners (PEP) launched a hostile, non-binding indicative offer of $1.40 for oOh!media in late April, a 65% premium to the prior close, valuing the outdoor advertising company at approximately $747 million. The stock surged almost 50% on the news, its largest single-day move on record. The loss of the Auckland Transport contract and intensifying competition from digital advertising giants had previously sent the stock down towards its COVID lows before the bid.
- PEP’s offer is heavily conditional, requiring satisfactory due diligence, PEP Investment Committee approval, unanimous board recommendation, FIRB approval, and New Zealand Overseas Investment Office sign-off.
The 65% premium to a stock trading at record lows tells you everything about where PEP sees the private market value versus the public market price. The conditionality is standard, but the fact that this is unsolicited and non-binding means PEP wants due diligence access before committing. The first decision point is whether the board grants that access to PEP, but considering the stock was sitting around record lows the day before, the board’s negotiating position feels weak.
- There’s a lot of water to go under the bridge on this deal, and we wouldn’t be surprised to see it fall over.
