Monday, 21 August 2017 11:01

Vocus bidders drop out of the race

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Vocus Telecommunications has announced that both the bids it received for an acquisition have been called off as the bidders were unable to commit to terms that were acceptable by its board.

The company said in a statement today that, right through the due diligence process, the two bidders Kohlberg Kravis Robert and Affinity Equity Partners had indicated support for Vocus' strategic plans and transformation programme.

But both bidders had now advised that they were unable to support an acquisition on terms that were acceptable to the board, it added. The compay's share price fell about 16% to $2.70 following the announcement

Both bids were the same, offering $3.50 a share and pricing Vocus as being worth $2.2 billion. Including debt, that came to $3.3 billion.

KKR made its bid on 7 June while Affinity approached Vocus in July.

Vocus chairman David Spence said: "The board’s focus continues to be to act in the best interests of all shareholders. Following the receipt of the initial, indicative proposals from the two parties, we believed it was in shareholders’ best interests to grant those parties the opportunity to conduct non-exclusive due diligence. 

"Throughout this process the company continued to pursue its standalone business plans and its transformation programme outlined at the company’s recent investor day in June. 

"The process with the bidders has now concluded and the board is looking forward to working with management to deliver improved returns for shareholders over the medium and long-term future."

Last week, Vocus advised investors that it would take an impairment hit of $1.53 billion across its Australian and New Zealand operations and that its profit for the full year 2017 would fall short of guidance.


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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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