The consolidation of the outdoor advertising market, which started several years ago, may yield a surprise ending sometime in the next few months. Churchill Media, the market's third-largest player, is about to be sold by its owner, Swedish investment fund Oresa Ventures. Market leader Euromedia is among the potential buyers, according to sources close to negotiations.
The acquisition of Churchill Media by Euromedia would create a player with more than 60% in market share, double the 25-28% held by the main competitor, Exclusiv Media.
Moreover, Euromedia and Exclusiv would achieve clear market domination, with some 85% in cumulated market share.
According to the quoted sources, Oresa Ventures has received three offers for Churchill Media, but Euromedia is the most likely winner. Euromedia is controlled by an American investment fund - Advent International.
Cornel Marian, the representative of Oresa Ventures in Romania, and Adrian Draghici, general manager of Euromedia, would not comment on the information.
Oresa Ventures first invested in Churchill Media in 1998, starting from a 30% stake. The Swedish fund then gradually bought more shares, coming to hold a 60% stake in the company.
In early 2003, Oresa kicked off preparations for selling the company, buying the stakes held by the other two Churchill Media shareholders: Innova Capital, another venture capital fund, and a British businessman, the company's founder. Following these transactions, Oresa's investment into Churchill Media grew to some 3.5 million dollars.
The company's operations were restructured last year, discarding the billboards that failed to bring enough revenues.
The sale proceedings started several weeks ago, and the company has received three bids, one from Euromedia and the other two from foreign companies, the quoted sources say.
The negotiations could come to an end in the next two months, with the transaction regarded as the terminus of a market consolidation process that began in 1999.
Euromedia, the current market leader, emerged after the acquisition of Monopoly Media by Advent International, which already held an outdoor advertising company in Romania - Europlakat. Advent then merged the two companies and a new leader, with 50% market share, was born.
Another significant transaction, which saw the arrival of a strategic market player, was the acquisition of Exclusiv Media by Newscorp, the group controlled by media tycoon Rupert Murdoch. Exclusiv Media was sold by businessman Elan Schwartzenberg, who is still the company's president. laurentiu.ispir@zf.ro
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