TEN is set to sell its outdoor media group EYE for up to $145m to oOh!media’s parent group, Outdoor Media Operations Pty Limited.
The deal will comprise gross cash proceeds of up to $120 million at completion and deferred payment of another $25 million in three years.
A TEN statement notes “Certain of EYE’s Australian onerous contracts will be retained by TEN but the operation of the relevant assets will be subcontracted to OMO. The net present value of these onerous contracts is estimated to be approximately $16 million.
“OMO intends to sell the US and UK operations of EYE to third parties. In the event that either or both of these operations are not sold within an agreed timeframe, TEN may choose, or be required, to reacquire them from OMO for nominal consideration. TEN will have an economic exposure to the outcome of the sale of the US and UK operations and, until sold, the funding of those operations.”
TEN CEO James Warburton, said: “We are pleased with the outcome of the strategic review of EYE that was announced on March 19.
“Successful completion of the transaction with OMO will be good news for TEN. It will make our balance sheet stronger by further reducing debt and will give us additional opportunity to invest in the creative renewal of TEN’s television content.”
TEN intends to use the proceeds to pay down debt together with its revenue raising of $200 million.
The deal is subject to regulatory approval.
OMO is controlled by Champ Private Equity.