Wednesday, 15 October 2008

Credit cruch and opportunities for media companies.

I've posted a few times (most recently yesterday) on the NYT Company's need to probably buy or develop (invest) it's way out of trouble, but with debt ratings so low, slipping revenue projections for 2009 et al, this isn't looking so easy.

Here's what happened to this media group yesterday (as a matter of small interest they have their global HQ around the corner from the IHT HQ in Neuilly):

Credit crunch leads JCDecaux to abandon takeover
Tuesday, October 14, 2008
PARIS: With the credit crunch making it impossible to finance a deal, JCDecaux scrapped efforts to buy News Corp.'s Russian billboard unit, an acquisition that would have created the world's largest billboard advertising company.
Shares in JCDecaux rose on relief that the company would not undertake the potentially risky venture into Russia and take on debt or issue stock to finance a deal. Shares in the company, which is based in Neuilly-sur-Seine, France, closed up 57 cents, or 4.2 percent at €14.09 in Paris.
The News Corp. chief executive, Rupert Murdoch, has expressed nervousness about Russia investments.
JCDecaux, the largest outdoor advertising company in Europe, said as recently as last week that it was pursuing its plan to buy News Outdoor Group, the Russian outdoor ad unit of News Corp.
But in a joint statement Tuesday, the two companies said, "Both companies recognize that economic and capital market conditions have made it increasingly difficult to conclude strategic partnerships on this scale."
Asked whether the freezing up of bank financing because of the credit crisis had been the reason for the decision, a JCDecaux spokeswoman said: "You can say that, yes."
Bruno Hareng, an analyst at Oddo Securities, said, "In the current climate, with tensions on credit markets, investors did not like the idea of JCDecaux taking on debt or coming up with a dilutive share issue."
"The deal entailed significant political and financial risks, even if it had a strategic appeal," Hareng added.
JCDecaux has been eager to expand in emerging markets, where News Outdoor is strong.
A combination of the two businesses would have created a company with annual revenue of about $3.3 billion, exceeding that of Clear Channel Outdoor, the world leader, which is based in Arizona.

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