INTERVIEW: JCDecaux Awaits CBS Sale Decision On Outdoor Unit
June 16 2011 - 4:04PM
Dow Jones News
Outdoor-advertising company JCDecaux SA (DEC.FR) Thursday said
it is ready to make an acquisition bid for CBS Corp.'s (CBS, CBSA)
outdoor unit in order to break into the lucrative U.S. consumer
market, but the French group is waiting for CBS to decide on
opening talks over a sale.
"It is not a must-buy but, if we can do a deal there, we are
happy to do one," Chairman and Co-Chief Executive Jean-Francois
Decaux told Dow Jones Newswires in an interview at the Consumer
Goods Forum's Global Summit.
"An acquisition has to be done on the merits of what we get as a
footprint in the U.S. billboard market. For the time being, we are
not in the process of inviting [CBS] to [let us] buy the business.
It is up to them to decide when they are going to be selling it,"
he said.
JCDecaux is the world's largest outdoor-advertising company and
overtook U.S. rival Clear Channel Outdoor Holdings Inc. (CCO) by
recording 2.35 billion euros ($3.3 billion) in revenue last fiscal
year.
It currently ranks No. 4 in the U.S., behind Clear Channel
Outdoor, CBS and Lamar Advertising Co. (LAMR), with revenue of
around $200 million.
Decaux noted that an acquisition in the U.S. is a priority. "We
are still growing organically in the U.S., but there is level to
what can be done. You can't build new billboards, so the existing
players are benefiting from a scarcity value," he said.
"The only way to expand, the only way to grow in the U.S. is to
buy an existing billboard company," he said.
The company has previously said it would be prepared to dilute
the Decaux family's 72% stake in the company to finance a large
deal as long as they kept full control of any new entity.
Decaux also said that, while the group's focus is on organic
growth, it would also scan developing markets for acquisition
deals. "We have been preparing ourselves for the last 30 years,
since I joined the family business, by growing organically in many
markets around the world to become less resilient on the French
market."
The company targets 30% of its revenue coming from emerging
markets in Asia, Africa, Latin America and the Middle East in the
next five years, up from 23% currently.
"We are taking advantage of the growth of the mega cities," he
said.
Still, even for more mature markets such as Europe and the U.S.,
which are in the grip of austerity measures linked to macroeconomic
debt reduction, Decaux is optimistic.
"I feel pretty good about the future of our industry, even in
mature markets, because I think we can gain share against
traditional media," he said.
-By Simon Zekaria, Dow Jones Newswires; +44 207 842-9410;
simon.zekaria@dowjones.com
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