Insider was asked by an investment banker earlier this week why he hasn’t listed his out of home company for sale.  Insider told the banker now is a bad time to sell because the uncertainty caused by covid.  There seems to be a widening bid-ask on transactions.  Lamar CEO Sean Reilly and CFO Jay Johnson said as much on yesterday’s Lamar earnings call.

On yesterday’s OAAA webinar PJ Solomon Investment Banker Mark Boidman said there’s a gap in the bid-ask spread for out of home mergers and acquisitions

We  don’t have the confidence yet in terms of folks really going out and stepping out of their shoes in terms of M&A.  I think we need to see more certainty.  Certainty builds confidence.  Confidence drives M&A.  Having said that, we’ve seen a lot of activity on the local side.  There’s certainly been M&A activity in terms of local markets, particularly in the summer…What it really comes down to is the gap between seller expectations of valuation and where buyers are prepared to pay and until sellers bring those expectations down it becomes very hard as a seller to go out there today and say you want a 2019 valuation off of 2019 earnings…people are focused on 2020 obviously…looking at 2021 we don’t have that certainty.  But as the certainty picture becomes more clear and valuations stabilize…we think that given all the characteristics of out of home, given the challenges of other media channels, we think out of home valuations will recover.  But it will take time.  With all that said we think 2021 will be an active year…certainly you’ll see some restructurings, some capital raising…we do think there will be some M&A we just don’t think is will be at the levels of 2018-2019.

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