Tuesday, 11 June 2019 09:04

Energy firm AGL seeks to buy Vocus for $3b Featured

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Energy firm AGL seeks to buy Vocus for $3b Image by mohamed Hassan from Pixabay

Vocus Communications has received another takeover offer, this time from AGL Energy, which has made a bid to buy all the shares in the company for $4.85 a share, meaning that the total bid would come to a shade over $3 billion.

AGL made an offer to buy Vocus in May but backed out on the last day of the month when the terms of due diligence could not be agreed.

Last week, Swedish equity firm EQT Infrastructure pulled out of a bid for Vocus that valued the company at $3.3 billion or $5.25 a share.

In an announcement to the ASX on Tuesday, Vocus chief executive Kevin Russell said: "After last week's announcement that discussions with EQT Infrastructure had ceased, AGL returned with a non-binding and indicative proposal to acquire Vocus for $4.85 per share.

"There is a clear market opportunity for Vocus, which is generating significant interest in our business and our assets. We are focused on executing our turnaround strategy and delivering the opportunity in front of us.

"However, we have been clear that the board will always act in the best interests of our shareholders to engage with credible parties that bring forward proposals that are worthy of further consideration.

Vocus said the indicative proposal was subject to completion of a four-week period of exclusive due diligence to AGL’s satisfaction; unanimous recommendation from the Vocus Board; and entry into a mutually acceptable scheme implementation agreement.

"Any scheme implementation agreement would also be subject to a number of further conditions, including shareholder, court and regulatory approvals," the announcement said.

AGL said in a statement: "AGL’s interest in Vocus is consistent with AGL’s strategy to meet the needs of increasingly connected customers as energy and data value streams converge and the traditional energy sector transforms – and aligned with AGL’s capabilities in integrating and managing complex assets and customer portfolios.

"AGL believes acquiring Vocus may be an optimal way of executing this strategy, creating material shareholder value and driving customer loyalty while providing access to a market-leading integrated broadband fibre asset base and creating considerable additional options for long-term growth."

Vocus has appointed UBS as its financial adviser and Allens as its legal adviser.

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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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