MediaWorks to merge with QMS, outdoor advertising giant

Broadcaster MediaWorks is exploring a potential merger with QMS Media's New Zealand outdoor advertising business, listed on ASX.

QMS said it has signed a memorandum of understanding for the proposed merger, which is subject to binding final terms.

The agreement would create a new entity offering radio, television, digital and outdoor advertising in New Zealand.

It is understood that the new entity would be owned 60% by Oaktree, the owner of MediaWork hedge funds, and 40% by QMS Australia.

Wayne Stevenson, president of QMS Media, said: "New Zealand is important to our business and we are excited about the potential opportunity to create a leading multimedia group that will transform the advertising industry into New England. Zealand ".

the Herald understands that MediaWorks staff have been invited to attend a meeting this morning prior to an announcement.

MediaWorks recently informed staff of an imminent restructuring of its radio business, including the merger of RadioLIVE with its existing Magic network and the new designation of "Magic Talk." This should be confirmed today.

The company's latest result showed a net loss of $ 5.7 million for the fiscal year up to December on revenue of $ 300.2 million.

Oaktree is looking to reduce its exposure to MediaWorks. Last year, the US hedge fund reportedly had discussions with Southern Cross Austereo for the sale of the company's radio assets.

Oaktree acquired the entire MediaWorks property in 2015 after acquiring minority stakes in rival private equity firms TPG Capital and Bain Capital, following a receivership and a restructuring. of his debt.

MediaWorks President Jack Matthews said the proposed merger represented a significant investment and commitment in New Zealand. He said that MediaWorks had made great progress over the past two years under the leadership of Michael Anderson.

Radio assets have long been the most coveted aspect of the MediaWorks asset portfolio, and previous speculation has suggested that QMS may be interested in acquiring part of the company.

Today, MediaWorks' RP is cheating a single quad-play that would see four media channels coming together under one umbrella.

While other traditional media are struggling to cope with digital disruption, the outdoor industry has better managed the transition.

The New Zealand Outdoor Media Association (OMANZ) advertising spend data shows that spending on outdoor advertising has increased steadily over the last six years.

Nielsen figures show that the total amount spent on outdoor advertising has increased from $ 95 million in 2015 to $ 140 million in 2017.