INTERVIEW: JCDecaux Awaits CBS Sale Decision On Outdoor Unit

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

CBS (NYSE:CBS)
Historical Stock Chart
From May 2024 to Jun 2024