Three owner MediaWorks to take over NZ arm of Australia's QMS

Thursday, 29 November 2018

MediaWorks is merging with the NZ arm of Australia's QMS.

MediaWorks, owner of television channel Three, and the New Zealand arm of Australian listed media firm QMS will merge to form a single business by the end of June.

The combined firm will be majority-owned by MediaWorks' existing shareholder, United States private equity company Oaktree, with ASX-listed QMS holding a 'material but non-controlling stake'.

The deal remains subject to some conditions, including the agreement of final binding terms, but it has been agreed MediaWorks' existing chief executive Michael Anderson would head the firm.

A deal between the firms of some sort had been tipped in the Australian and New Zealand media last month, however it had been assumed QMS was more likely to be a buyer of MediaWorks.

QMS is valued at A$310 million (NZ$330 million) on the ASX and its main business is providing outdoor advertising in Australia and New Zealand, including at sports grounds.

Although relatively small, the overall trans-Tasman QMS business is profitable compared to most media firms and posted a net profit of A$18m and an operating profit of A$49m on sales of A$204m in the year to the end of June.

QMS did not split out its Australian and New Zealand results in its annual report published in October.

But it said it had seen softer conditions in the media market in New Zealand, with the growth in its outdoor advertising business slowing, year-on-year, and QMS NZ performing 'in line with the market'.

'A decline in business confidence had driven softer market conditions in New Zealand, in comparison to previous years of higher growth,' it said.

QMS' shares rose 2.5 per cent to A$0.95 in the wake of the announcement.