Exterion Media plans Clear Channel takeover

TfL: Exterion Media has won the outdoor ad contract for the Tube, Overground, DLR and Crossrail
TfL: Exterion Media has won the outdoor ad contract for the Tube, Overground, DLR and Crossrail

Exterion Media is planning a takeover bid for Clear Channel's international business, Campaign understands.

One source claimed Exterion Media or its private equity owner, Platinum Equity, has already made an approach to Clear Channel International’s owners, although a second source maintained there has been no approach to CCl itself.

The catalyst for Exterion Media and Platinum Equity to consider a takeover move has been winning Transport for London's £1.1 billion out-of-home ad contract, the most valuable such deal in the world, on Thursday. 

However, Exterion Media and Platinum Equity are believed to have already done preliminary work on a possible bid approach before the outdoor company beat rival JCDecaux to win TfL’s business.

A merger between Exterion Media and its bigger rival CCI could create a powerful "number two" to JCDecaux outside the United States. 

Exterion Media did not comment and referred questions about future plans to its owner. Platinum Equity’s London office did not respond to Campaign’s requests for comment in time for publication.

Clear Channel International did not comment. A spokesman for iHeartMedia, the parent company of Clear Channel International, in New York said: "As a policy, we don't comment on rumours or speculation."

Exterion Media is in a strong position after winning TfL’s eight-and-a-half-year contract because it guarantees a solid source of revenue. It is estimated to be worth £150 million a year now but industry observers have claimed it could be worth £250 million to £300 million a year by the end of 2024. Ian Whittaker, a media analyst at Liberum Capital, cited estimates that the contract is worth about £2 billion on the basis that TfL expects to receive about £1.1 billion.

It is not clear how much Clear Channel International is worth but it could be upwards of $2.5 billion (£1.8 billion) because it had operating profit before exceptional items of $261 million last year on sales of $1.6 billion. However, iHeart Media is heavily indebted and, although its private equity owners Bain Capital and Thomas H Lee Partners are thought to be keen to exit after buying Clear Channel in 2008, they have faced legal wrangles with bondholders.

Exterion Media is smaller than its rival with a turnover thought to be in the region of $800 million but that could rise to $1 billion following the TfL triumph. 

Analysts have speculated that the TfL decision could prompt Exterion Media and Clear Channel International to consolidate regardless of whether Exterion Media or JC Decaux won the contract.

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