Clear Channel has signalled that it will be looking at M&A opportunities as the out-of-home company prepares to become an independent business on the US stock market.
William Eccleshare, who will become global chief executive of Clear Channel in the spring, said the company’s creditors have shown "great confidence" by retaining their stakes rather than looking to sell, as Clear Channel finally separates from debt-laden parent company iHeartMedia in a long-awaited move.
Eccleshare, who has worked at Clear Channel since 2009, said he will be setting out "strategic plans" and "identifying which new opportunities we will be pursuing" in the coming weeks and months.
Clear Channel has in effect been in corporate limbo because of iHeartMedia’s debt problems and was unable to take part in the recent wave of M&A activity in the UK OOH sector that saw radio group Global make three acquisitions.
However, Clear Channel is poised to become an independent business after a debt-for-equity swap with iHeartMedia’s creditors – the bondholders who own the debt – in a Chapter 11 bankruptcy protection process.
Those creditors include investment groups Pimco and Franklin Templeton Investments, which will each own about 20% of Clear Channel when the process completes around April.
They have agreed to back the OOH company as an independent business with Eccleshare at the helm and a new board of directors.
Eccleshare told staff in a "new year" memo this week: "I firmly believe their decision shows that we are viewed as a successful business with potential for further growth."
He described it as "unequivocally good news for us and [it] gives us the stability and mandate to continue to invest in the transformation of our medium" because "we will have the independence to drive the businesses forward".
Clear Channel announced Eccleshare’s planned appointment just before Christmas and is expected to unveil details about the board shortly.
The debt-for-equity swap will mean that Clear Channel, which is already listed on the US stock market, will be able to raise money and carry out M&A deals instead of being under the control of iHeartMedia, which has controlled about 90% of the shares.
Clear Channel has annual revenues of about $2.6bn (£2bn), making it roughly on a par with a FTSE-250 company by size.
The business will keep Clear Channel International and Clear Channel Americas as separate units.
Eccleshare will continue to oversee the international business in addition to his new global role, while Scott Wells, head of Clear Channel Americas, will report to him.
Investors have become increasingly bullish about the growth prospects for OOH because the medium offers advertisers mass reach, digital flexibility and brand safety in a fragmented media marketplace.
Ocean Outdoor, another potential acquirer in the OOH sector, confirmed its own plans this week to list on the London stock market, with shares due to begin trading on 10 January.
It is thought that Clear Channel will consider both acquisitions and divestments after it separates from iHeartMedia. Clear Channel’s last significant M&A move was the sale of its Australian business in 2016.
Eccleshare would not comment on Clear Channel’s future M&A strategy, but he welcomed Global’s recent acquisition of Exterion Media, Primesight and Outdoor Plus as evidence that OOH has strong prospects.
He said: "What Stephen [Miron, Global’s group chief executive] and Global have done absolutely demonstrates their confidence in the sector, which we share."
Eccleshare, 63, is an advertising veteran who ran JWT London and Y&R in Europe.
He had a spell running both Clear Channel’s international and US operations for several years until 2015.
IHeartMedia's decision to keep those businesses as separate units prompted speculation at the time that it was considering a sale of one or both of the divisions to shore up its debt problems.