The oOh!Media Ltd (ASX: OML) share price was temporarily paused on Monday morning pending an announcement.
The media and outdoor advertising company's shares have since returned to trade are up almost 1% to $2.89.
Why were oOh!Media's shares paused from trade?
The oOh!Media share price was paused from trade this morning whilst the company prepared a response to media speculation.
That speculation refers to an article in The Australian claiming that it has hired Macquarie Group Ltd (ASX: MQG) to help it find a private equity company to back a management buyout and delist it from the share market.
Prior to today, the company's shares were down 40% from the 52-week high of $4.74 set in July. This share price weakness has been driven by a very disappointing first half performance and guidance for the full year.
In August oOh!Media reported underlying net profit after tax of $9 million, down 24% on the prior corresponding period. This was blamed on May's federal election and very weak market conditions.
It also cut its full year guidance from underlying EBITDA of between $152 million and $162 million, to $125 million and $135 million.
Given that the management team of industry peer QMS Media Ltd (ASX: QMS) took advantage of its own share price weakness to strike a deal to privatise the outdoor advertising business with Quadrant Private Equity earlier this year, it isn't hard to see why there is speculation that oOoMedia might do the same.
oOh!Media response.
However, this morning oOh!Media dismissed claims that it may be the subject of a management buyout.
The company's chief executive officer, Brendon Cook, said: "The article is without any basis in fact."
Furthermore, the company's board and management team confirmed that they have not received any proposal regarding a management buyout. Nor are they in any discussions regarding a potential management buyout.
It concluded: "The company remains focussed on achieving organic growth by leveraging the reach and diversity of its product portfolio in the Out of Home media sector. oOh! is undertaking digital transformation, increasing efficiencies, enhancing products and offerings and maximising shareholder value creation by delivering long-term sustainable revenue and earnings growth."
Elsewhere, rival HT&E Ltd (ASX: HT1) is trading slightly higher today despite the release of a mixed trading update.
