ASX-listed outdoor advertiser QMS Media has released a statement to address reports that its facing a $200 million lawsuit by outdoor advertising business Manboom over lost revenue following the alleged breach of a 2014 cooperation agreement.
|(l-r) Manboom co-owner John Singleton and QMS Media CEO/MD Barclay Nettlefold|
QMS - currently the subject of a $420 million takeover bid by private equity firm Quadrant - confirmed the previously little-known NSW Supreme Court action by Manboom - co-owned by entrepreneur John Singleton and property developer Robert Whyte - but it questioned an Australian Financial Review report that puts the value of the damages alleged in the lawsuit at $200 million.
In a statement to the ASX titled ‘Media Speculation’, QMS Media said it was not aware of “any facts or materials” which support the size of the claim referred to in the AFR article:
QMS Media Limited is aware of an article published earlier today [Monday] in the Australian Financial Review (AFR) regarding a dispute which involves a QMS subsidiary, Q Media Pty Ltd, and Manboom Pty Ltd, Manboom Signage Partnership Pty Ltd and Miller Street Partners Pty Ltd (Manboom Group).
This dispute has been running for some time and has been the subject of court proceedings originally filed by the Manboom Group in the NSW Supreme Court in June 2018, and the subject of a cross-claim by QMS filed in August 2018.
The dispute has been noted in QMS' Annual Report and Accounts, as published on 18 April 2019 and its Half Year Report and Accounts published on 23 August 2019, in the notes to accounts regarding contingent liabilities.
The claim by the Manboom Group is denied by QMS and is being defended. At no time in the proceedings to date has the Manboom Group set out the quantum of any claim for damages and QMS is not aware of any facts or materials which support the quantum of the damages referred to in the AFR article.
QMS is not aware of any further information since the publication of its Half Year Report and Accounts which would cause it to change its view on the merits of the claim or the potential liability which QMS may have in respect of the claim.
AFR said QMS was arguing in court that the cooperation agreement with Manboom was not legally binding. “But it has launched a counterclaim stating that if the court rules the agreement is legally binding, then Manboom breached the agreement via its upgrade of Sydney's M2 Motorway from static to digital signs,” said the report.
“Court documents for Manboom state the cooperation agreement refers to NSW, or development opportunities where 50 per cent of the revenue is expected to come from NSW,. Manboom alleges QMS has developed a number of sign projects in NSW on its own without coming to Manboom, including in Leichhardt, Kogorah, Eastlakes, Liverpool, Strathfield, Homebush, Darlinghurst, Chullora, Broadway and Rozelle, among others. Sources said an internal assessment of different outdoor advertising sites by Manboom alleged it had missed out on between $150 million and $200 million from QMS under the agreement.”
The case is set for a directions hearing in the NSW Supreme Court on December 13.
Private equity firm Quadrant’s bid to acquire QMS Media is subject to approval from QMS shareholders, the Australian Foreign Investment Review Board (FIRB) and the New Zealand Overseas Investment Office (OIO).
|Digital stoush - QMS M2 motorway (Sydney) billboard (photo QMS Media)|