Monday, 27 May 2019 11:07

Vocus gets A$3.3b takeover offer from Swedish equity firm Featured

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Vocus gets A$3.3b takeover offer from Swedish equity firm Image by Gerd Altmann from Pixabay

Australia's fourth largest telecommunications company Vocus Communications has advised the ASX that it has received an indicative takeover offer from Swedish private equity firm EQT Infrastructure for A$5.25 per share, valuing the company at A$3.3 billion.

Vocus said the due diligence was likely to take a number of weeks and it had granted EQT the access to enable it to put forward a formally binding proposal.

"The board notes that there is no certainty that this process or the indicative proposal will result in an offer for Vocus," the statement said.

"Vocus shareholders do not need to take any action in response to the indicative proposal at this time. Vocus will update shareholders, in accordance with the company's continuous disclosure obligations, in due
course."

The company is no stranger to takeover offers, with a report in June 2017 saying that TPG Capital could team up with Vocus founder James Spenceley to examine a takeover of the communications company in the event that the equity firm's bid for Fairfax Media does not come off.

This came shortly after reports said a bid was being made for Vocus by the American equity firm Kohlberg Kravis Roberts.

Vocus has been hit by the ever-decreasing margins of its broadband business as the NBN Co has made it difficult for RSPs to turn a profit. Its retail business was written down by about $1 billion in 2017.

The company said it had appointed UBS as its financial adviser and Allens as legal adviser.

In October 2016, a plot to oust Vocus chief executive Geoff Horth led to the departure of Spenceley and fellow board member Tony Grist. Vocus shares slumped to a 13-month low after the incident.

Another big fall, by more than a quarter, occurred in November the same year and saw $874 million wiped off its value after it shared its first guidance to expected earnings along with its new acquisitions, NextGen Networks, M2 Group and Amcom.

In May 2017, Vocus issued its second profit warning in six months, leading to another big fall in share prices, this time by 30%. Soon after, there were reports that Vocus was looking at selling off its data centres.

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Sam Varghese

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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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