Vocus bidders bow out of takeover talks

Cornelia Mascio
Agosto 21, 2017

Both bids were the same, offering $3.50 a share and pricing Vocus as being worth $2.2 billion.

Australian telecoms company Vocus Group Ltd said on Monday that takeover discussions with Kohlberg Kravis Roberts & Co and Affinity Equity Partners had ended, after the private equity players had each lodged A$2.2 billion bids for the telco.

That followed a bid of the same amount by USA private equity group KKR in June. "However, the Bidders have now advised that they are unable to support a transaction on terms acceptable to the Board. Accordingly, all discussions have now ceased".

The news saw Vocus share prices drop earlier today.

In July, Vocus announced a second bidder, Affinity Equity Partners, had also put forward a non-binding proposal.

"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", Vocus chairperson David Spence said.

Vocus has been shopping itself for several months following twin profit downgrades, the last of which was the result of duplicated costs and a failure to realise efficiencies following several acquisitions.

At the time of publication, Vocus' shares were trading at $3.22.

According to Vocus, its board then chose to "conclude the sale process" due to the company's positive outlook for FY18, which forecasts revenue growth to between AU$1.9 billion and AU$2 billion and underlying EBITDA growth to between AU$370 million to AU$390 million.

"Notwithstanding the competitive market conditions, and the increased costs associated with the migration of customers to the NBN [National Broadband Network], the board is confident that the company can deliver a return to sustainable organic growth following a year of transition in FY17", it said.

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