Maiden sale talk as profit warning sends shares crashing

by Jennifer Whitehead, Brand Republic 20-Dec-05, 11:00

LONDON - Outdoor advertising group Maiden saw its share price plummet more than 17% today after revealing it is likely to post an operating loss for the year on the back of disappointing sales.

In a bad-news update this morning, the company said it had appointed investment bank N M Rothschild to "assess the future strategic options for Maiden". This could include a sale of the company.

Maiden blamed the anticipated loss on a reduced ability to generate additional revenue on new contracts, expenses relating to bid costs and consultancy fees, ongoing litigation and expenses relating to the first year of contracts.

Maiden, headed by chief executive Ron Zeghibe, said: "Although sales in the last two months have shown some progress over 2004, they have fallen significantly short of expectations."

It also told investors that it had withdrawn from the tender process for the Irish state-owned rail and bus operator CIE's ad contract, after failing to agree satisfactory terms to run its advertising assets in Ireland. It had been selected as the preferred tenderer in October for the five-year contract.

At the time of writing, shares in Maiden were down by 17.79% to trade at 67p, a fall of 14.6p.

Should Maiden decide to go for a sale, potential buyers could include the three other major players in the outdoor ad business: Clear Channel, Viacom and the French company JCDecaux.

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