Vocus left reeling as AGL walks from talks

SHARES in the company behind iPrimus and Dodo have cratered after another suitor ran the rule over its books only to beat a hasty retreat.

AGL Energy has walked away from its proposed $3 billion takeover of Vocus, withdrawing a non-binding offer for the telecommunications player and ceasing to scrutinise its books.

Vocus shares fell 24.5 per cent to $3.29. It was the worst single-session rout for the group in more than a year and wiped more than $660 million off its market value.

AGL said it was no longer confident that buying Vocus would add value for shareholders.

The energy heavyweight is the second suitor to walk away from Vocus this month.

Swedish private equity house EQT Infrastructure had also made a tentative play for Australia’s fourth-biggest telco only to withdraw after a due diligence process.

Just days after EQT dropped its higher-priced offer, AGL last week said it was revisiting its interest in Vocus and had tabled a buyout proposal that valued the company at $3.02 billion.

AGL had proposed paying $4.85 a share for the group.

That was a premium of almost 27 per cent on the closing price for Vocus shares before the move was announced, but below the $5.25 a share EQT had offered before retreating.

AGL chief Brett Redman said yesterday the group believed there were opportunities “as energy and data value streams continue to converge and the traditional energy sector accelerates its transformation”.

“However, we are no longer confident that an acquisition of Vocus at the proposed terms would represent sufficient certainty of creating value for AGL shareholders,” he said.

It emerged last month that AGL had previously contacted Vocus with a buyout proposal but the pair had been unable to agree on terms for the telco to open its books for scrutiny.

Vocus chief Kevin Russell said the company’s management team would now be able to focus its attention on “realising the opportunity that we have ahead of us”.

Analysts said AGL’s decision to walk away was positive for its investors. AGL shares rose 1.6 per cent to $19.88.