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APN Outdoor Group Ltd (ASX:APO) receives $1.1 billion bid from JCDecaux

The APN Outdoor Group Ltd (ASX: APO) share price could be in for a decent jump this morning after the company received a $1.1 billion bid from French outdoor advertising giant JCDecaux Group.

JCDecaux announced yesterday that it had submitted an indicative and non-binding proposal for all of APN Outdoor’s shares for $6.52 per share in cash. This offer represents an 11% premium to the closing price yesterday.

The French business justified bidding for APN Outdoor by saying that it would be complementary to its existing out-of-home media assets in Australia, which are primarily in the ‘street furniture’ segment.

JCDecaux has been operating in Australia since the 2000 Olympic Games and this bid could result in the French advertising giant becoming the largest outdoor advertiser in Australia.

Goldman Sachs is acting as JCDecaux’s financial advisor for this bid. The offer is subject to all the usual conditions like due diligence, ACCC approval and FIRB approval.

AFR sources believe that APN Outdoor will reject the offer and it will hire Morgan Stanley as part of the defence team.

APN Outdoor has been a strong performer for shareholders over the past few months. Since mid-March it has gone up by 43% before any gains today.

Foolish takeaway

I’m not sure that a 10% premium to yesterday’s closing price values highly enough the increase in earnings that APN Outdoor could experience after it has finished changing its boards from static to digital. I’d want more if I were an APN Outdoor shareholder. Time will tell if a higher bid comes in.

However, if I did own APN Outdoor shares and I sold them at some point, I'd consider re-investing the money back into these growth shares.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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