SYDNEY (Reuters) - Australia’s antitrust regulator said a plan by the country’s top billboard firm to buy its largest rival may jack up the prices charged to advertisers while cutting service levels, a sign it may block the A$735 million ($545 million) deal.
For shareholders of oOh!Media, the deal, worth A$4.48 per share, represented a more than doubling of its issue price when it listed just two years earlier.
Shares of APN fell 4.6 percent while oOh!Media’s stock slid 4 percent to $A4.30 in morning trade.
The Australian Competition and Consumer Commission (ACCC), said on Thursday that it took the preliminary view that combining the companies would amount to a “substantial lessening of competition in the supply of out-of-home advertising services”.
It may also result in less innovation, it added.
APN and oOh!Media said they would work with the regulator to address the matters it had raised.
“We are currently considering next steps, including impacts on the proposed transaction timeline,” the companies said in a joint statement.
Out-of-home advertising includes advertising on billboards, at bus shelters, train stations, trains, taxis, buses, leisure centers, public toilets, shopping malls and supermarkets.
The ACCC is due to make its final ruling on July 6.
($1 = 1.3464 Australian dollars)
Reporting by Byron Kaye; Editing by Edwina Gibbs