INTERVIEW: JCDecaux CEO: Interested By CBS Outdoor Assets
July 31 2009 - 2:23AM
Dow Jones News
French outdoor advertising company JCDecaux SA's (DEC.FR) is
best positioned to benefit from the expected consolidation in its
sector and would be interested in assets in the U.S., particularly
Clear Channel Outdoor Holdings Inc. (CCO) or CBS Outdoor if they
were for sale, its Chief Executive Jean-Francois Decaux said.
"Nowadays, people think about Clear Channel but CBS Outdoor is
another U.S.-based player that could be of interest for us," he
said in an interview with Dow Jones Newswires.
"As for Clear Channel, nothing is going on at the moment. As for
CBS, one feels that outdoor advertising is not a core business.
What matters to them is media content," Decaux said.
JCDecaux has planned to enterthe U.S. for a long time as the
country represents 40% of the global outdoor advertising market,
and the acquisition of either Clear Channel Outdoor or CBS Outdoor
would turn JCDecaux into the global number one in the sector.
CBS Outdoor, a unit of U.S. media group CBS Corp. (CBS.), is the
world's third-largest outdoor advertising group by revenue, after
Clear Channel and JCDecaux. In 2008, CBS Outdoor's revenue was
$2.17 billion, representing 16% of CBS' overall revenue, while
JCDecaux's revenue last year amounted was $3.19 billion.
Clear Channel, JCDecaux and CBS Outdoor together represent 30%
of the global outdoor advertising market.
CBS wasn't immediately reachable for comment.
JCDecaux's debt has been only 1.6 times its operating margin
over the last 12 months, compared with 4 to 5 times for its
competitors, Jean-Francois Decaux said, adding the group has EUR600
million of unused credit lines and no significant debt repayment
planned before 2012.
The group could also increase its capital if it undertook
"transforming transaction," but current market conditions aren't
favorable due to the depressed share price.
JCDecaux shares have lost around 55% since the end of 2007 when
they reached their historical peak, and closed Thursday at
EUR12.59.
The JCDecaux family, currently the majority shareholder in
JCDecaux with a 73% stake, "would be ready to be diluted around 50%
or slightly below," Decaux also said.
Company Web site: www.jcdecaux.com
-By Thomas Varela, Dow Jones Newswires; +331 40171740;
thomas.varela@dowjones.com;