oOh!media has dismissed two non-binding takeover bids, including a fresh A$1.45 per share offer from I Squared Capital, while inviting revised proposals and pausing its share buyback.
- Two unsolicited bids received: A$1.45 and A$1.40 per share
- Board unanimously rejects current offers as undervaluing company
- Limited due diligence access granted for potential improved bids
- Engagement ongoing with other potential bidders
- On-market share buyback program paused
Fresh A$1.45 Per Share Bid from I Squared Capital
oOh!media Limited (ASX:OML) has received a new non-binding indicative offer from I Squared Capital (ISQ) to acquire 100% of its shares at A$1.45 per share via a scheme of arrangement. This unsolicited proposal comes shortly after Pacific Equity Partners (PEP) tabled a similar offer at A$1.40 per share, which the board had already deemed insufficient. ISQ’s offer is conditional on due diligence and binding documentation, with a price adjustment clause reducing the offer by any future dividends paid to shareholders.
Board Unanimously Rejects Current Offers as Undervaluing oOh!
After careful consideration alongside its advisers, oOh!’s board has unanimously concluded that neither the ISQ nor the PEP proposals reflect the intrinsic value of the company. The board has made clear it will not recommend any binding offer at or below these price levels. This stance underscores a firm valuation view despite the premium bids, which suggests management expects either higher offers or a better strategic outcome for shareholders.
This follows the earlier PEP bid announcement and the board’s initial response, which set the tone for the current negotiations. The board’s rejection signals a cautious approach to change of control proposals, balancing shareholder value against market conditions and company prospects, which recently included Pacific Equity Partners Proposes A$1.40 per share takeover.
Limited Due Diligence Access and Open Engagement with Other Parties
Despite rejecting the current offers, the board is prepared to provide both ISQ and PEP with limited due diligence access under confidentiality agreements. This move aims to facilitate the submission of potentially improved bids that might meet the board’s valuation threshold. The company is also in talks with other interested parties, leaving the door open for further proposals that could reshape the takeover landscape.
oOh!’s willingness to engage broadly reflects a strategic openness to change of control discussions, yet the preliminary nature of talks means there is no guarantee of revised bids or recommended offers emerging from these conversations.
Pause on Share Buyback Amid Bid Activity
In light of the takeover interest, oOh! has decided to pause its on-market share buyback program. This suspension likely aims to preserve cash and avoid complicating shareholder equity dynamics during a period of potential ownership change. The buyback pause also aligns with the company’s cautious stance on capital management amid takeover speculation.
oOh!media’s recent financial performance, including a 7% NPAT growth and key contract wins such as with Transurban, has bolstered its market position and dividend profile, factors that may underpin the board’s valuation views during these takeover talks oOh!media Posts 7% NPAT Growth.
Bottom Line?
The board’s firm rejection of bids below A$1.45 per share sets a high bar for suitors, turning attention to whether revised offers or new bidders can meet shareholder expectations.
Questions in the middle?
- Will ISQ or PEP submit a higher, binding proposal that the board can recommend?
- Could other potential bidders emerge and disrupt the current takeover dynamics?
- How will the pause in share buybacks affect oOh!’s share price and investor sentiment?