The acquisition of AMS by Agora is likely to be only the beginning of major changes in the outdoor advertising market in Poland. In the near future two other large companies, Europlakat and the Outdoor Group are also likely to change ownership. Analysts seem to think that times of stagnation are the best times to make purchases.
Europlakat has sufficient potential to keep its head above water but does not have the ability to take on the bigger firms in the long term in the opinion of MD Marek Kuzak.
From time to time there are also rumours on the sale of Cityboard Media, a company which specialises in large advertisements. Marcin Stan, the managing director of CM, was unable to confirm these rumours. He says that no changes are expected to the current shareholders.
Europlakat and the Outdoor Group have a large network of billboards. The cost of the upkeep of one billboard is around USD130 per month. Competition currently forces companies to sell below that amount which has caused losses this year. Investment funds have got their eyes out for bargains at the moment. Experts believe that it is the funds which could cause consolidation of the outdoor market. Funds such as Innova Capital which once had a share in Town & City and Enterprise Investors which attempted to take a stake in AMS have at some time stated their intention of investing in the market. Amongst those named to take a stake in Europlakat and the Outdoor Group is the AIG CE Capital Management fund.
Andrzej Szymański, analyst at BIG BG stock brokers thinks that negotiations are a good way to get intelligence. The fact that the funds are negotiating does not necessarily mean that they are interested in making an acquisition.
Another company which could become the focus of consolidation is media giant Agora which publishes best selling daily Gazeta Wyborcza amongst other publications. Agora has received the permission of the monopolies and mergers watchdog UOKiK for the acquisition of AMS and it is known to be window shopping further. It is considered likely that the Outdoor Group and Europlakat may catch its attention. Agora certainly has the financial muscle to fund investments worth tens of millions of PLN. However it would need the permission of the UOKiK and this time round the watchdog may not be so happy to give its stamp of approval.
Other companies that could be on the lookout for investors include the German Stroer which has recently changed its investment strategy and is planning on building a network of large, six by three metre, advertisement hoardings. Such panels are owned by Cityboard Media.
Janusz Malinowski, MD of Stroer in Poland says that Cityboard's panels are double sided whereas his company is interested in one sided advertising. He claims that a deal with CM is not a likely option.
Clear Channel Poland does not appear to have a very clear strategy. Without a song and dance, it is buying up and consolidating companies. However no-one there wants to talk about it.