Ströer SE & Co. KGaA

On June 29, 2012, the Regional Court of Hamburg sustained an action filed by JCDecaux against the split of back-lit scrolling 9m² billboard locations on public ground in Hamburg between JCDecaux, the city of Hamburg and Ströer. The judgment has a negligible operational and financial impact given that only 2 % of Ströer’s overall advertising units in Hamburg are affected. In any case, Ströer continues to hold the clear majority of advertising units in Hamburg.

In 2007, the city of Hamburg conducted a tender process for advertising concession rights consisting of three single lots, one of which was for 140 Mega-Lights. During the tender process the city of Hamburg formally and transparently introduced the pre-emptive leasing right of Ströer, which was explicitly and repeatedly accepted by all bidders during the course of the tender process. JCDecaux was initially awarded the tender for the lot in question and, as expected, Ströer subsequently exercised its pre-emptive right and assumed the agreement only in respect of 85 of these advertising units. The exercise of the pre-emptive lease right was explicitly accepted by Jean-Francois Decaux in a public press conference following the tender decision. Shortly afterwards, JCDecaux Germany entered into a written agreement accepting the application of the pre-emptive right and even received financial compensation for its related tender costs by Ströer. In April 2010, i.e. three years later and just before the IPO of Ströer, JCDecaux Deutschland GmbH filed a lawsuit against the involved companies of the Ströer Group as well as the city of Hamburg.

Ströer will appeal against the decision of the Regional Court of Hamburg as a matter of principle in the light of Jean-Francois Decaux's prior consent. Ströer regards the revocation of a mutual agreement between JCDecaux, the city of Hamburg and Ströer as an unacceptable business conduct. Although the

Court ruling is not finally effective yet, it is by law provisionally enforceable against the provision of a security by JCDecaux. Ströer will take all necessary operational and legal measures to prepare for a possible dismantling of the locations.

The 85 advertising units in question represent only 2% of a total of over 4,000 advertising units in the City of Hamburg operated by Ströer. Annual sales amount to a mid single digit million Euro amount with no profit contribution given the high revenue share payable to the city of Hamburg.
Ströer has so far solely exercised the pre-emptive lease right, which used to be a standard procedure in the European outdoor industry, for the specific tender lot in question in the city of Hamburg and, in accordance with a later general statement by the German Federal Cartel Office (Bundeskartellamt), the practice has not been applied since. Thus the decision by the Regional Court of Hamburg has no impact on any other past or future tender processes in Germany.

It has to be noted that the city of Hamburg has filed a lawsuit against JCDecaux on an alleged breach of contract regarding the tender lot awarded to JCDecaux for bus shelters for which JCDecaux has not paid the full rental charges to the city since the start of the contract in 2009.