28 March 2006
SPH Multimedia Private Limited, a wholly owned subsidiary of Singapore Press Holdings Limited (“SPH”) has invested US$26 million (S$42 million) for a 35% stake in leading China outdoor operator, TOM Outdoor Media Group Limited (“OMG”). The proceeds from the investment will be used to fund the expansion and development of OMG´s business. The consideration is payable in cash and was arrived at following negotiations on a willing buyer, willing seller basis. Following the investment, OMG´s parent company, Tom Group Limited (“TOM”) will hold 65% of OMG.
The investment values the shares in OMG at US$74.3 million (S$120 million), or an enterprise value of US$105 million (S$170 million), including a shareholder´s loan of US$30.8 million (S$50 million) from TOM.
This strategic investment will give SPH a foothold into China´s rapidly growing outdoor advertising market. OMG is one of the leading outdoor operators in China, with more than 300,000 square metres of advertising space across 60 cities in China, including Shanghai, Beijing and Guangzhou. OMG has 16 subsidiaries operating in China.
SPH Chief Executive Officer Alan Chan said the move would give SPH access to the largest outdoor advertising market in Asia, outside Japan.
“This is a notable business venture for us in China, and we´re entering into a partnership with the country´s largest player in the outdoor billboard advertising,” said Mr Chan, noting that the outdoor advertising market in China is estimated to be worth about US$1 billion this year.
“OMG occupies a unique position in this market, particularly with its spectacular billboards, and has outdoor advertising space in 60 cities. SPH can leverage on its established customer database and contacts with marketing and advertising agencies to harness considerable synergies.”
Mr Chan added that the outdoor media advertising is a new platform that SPH is investing in as another potential core business for the Group.
“Our stake in OMG complements our majority stake in SPH MediaBoxOffice, which is Singapore´s largest LED network media company. It´s part of our on-going efforts to offer more options and integrated marketing solutions to our clients, leveraging on our newspapers, magazines, Internet, radio and outdoor advertising.“
The investment will be funded by internal resources.
The transaction is not expected to have any material impact on the net tangible assets or earnings per share of SPH for the current financial year ending 31 August 2006.
None of the directors of SPH has any interest, direct or indirect, in the investment.
Issued by Singapore Press Holdings Limited
Co. Regn. No: 198402868E
Main board listed Singapore Press Holdings Limited is the leading media company in Singapore, in the print, Internet and broadcasting platforms. It publishes 13 newspapers in the four official languages and more than 80 magazine titles. Everyday, 2.8 million individuals, or 88 per cent of the people above 15 years old, read one of the SPH publications. Its Internet Business Unit manages the online editions of SPH’s major newspapers, which enjoy over 100 million pageviews from 6 million unique visitors every month.
SPH also owns a 20% stake in MediaCorp TV Holdings Pte Ltd, which operates free-to-air channels 5, 8, U and TV Mobile, and a 40% stake in MediaCorp Press Pte Ltd, which publishes free sheet Today. SPH has a 70% stake in UnionWorks which operates two entertainment radio channels, UFM 100.3 FM in Chinese and WKRZ 91.3 FM in English, and owns an 80% stake in SPH MediaBoxOffice Pte Ltd, Singapore´s largest LED network media company.
For more information about SPH, please log on to www.sph.com.sg