Consolidation In Hoardings

Sydney Morning Herald

Thursday May 17, 2007

Julian Lee

THE outdoor advertising industry underwent further consolidation yesterday after the listed Network Ltd bought smaller rival Media Puzzle.

Network paid $32.2 million for Media Puzzle, $8.9 million in cash and the rest in shares.

Under the terms of the deal global communications company WPP, which had a majority stake in Media Puzzle, will take a seat on the Network board.

The deal will add more posters to Network's portfolio but, more importantly, give it the ability to sell ads in more than 300 shopping centres, though not all of them would be considered primary malls.

Street furniture, which includes shopping malls, is one of the fastest growing areas of the outdoor ad industry, which grew 7 per cent last year to $378 million.

Network CEO Brendon Cook said the deal would give the group a 15 per cent market share, putting it ahead of JC Decaux but behind Ten's EyeCorp and market leader APN News & Media.

It comes as the outdoor industry both here and globally faces further possible consolidation with the news on Monday that US media company Clear Channel is to sell Adshel for an estimated $US3.2 billion ($3.85 billion). In Australia, Clear Channel is 50 per cent owner with APN of Adshel.

APN Outdoor chief executive Richard Herring declined to comment on speculation APN might lift its stake in Adshel. But commenting on the Media Puzzle deal, he said: "Competition is healthy and consolidation is also a good thing as it makes it easier for clients to book ads across the medium."

© 2007 Sydney Morning Herald

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