LIFE MORE ORGANIC IN ADLAND
Heat on Vocus after US company’s $2.2bn takeover bid
VOCUS faces tough questions, analysts say, after US private equity titan Kohlberg Kravis Roberts lobbed a $2.2 billion takeover bid for the growing Australian telecommunications group.
Shares in Vocus surged yesterday after the company de- clared KKR had proposed paying $3.50 in cash for each of its shares.
They closed up 21.7 per cent, adding more than $380 million to the group’s market value.
It comes after a bleak period for investors in Vocus, which has taken a hit on the stockmarket since August, shedding almost 70 per cent of its value.
Management has grappled with a rush to expand — beginning late in 2014 — with the $1.2 billion buyout of Amcom, a $3.8 billion takeover of M2 and the $807 million acquisition last October of Nextgen.
Through its Commander, Dodo and iPrimus brands, Vocus provides telco, data, cloud and energy services to consumers and businesses Australia.
According to Citi analyst David Kaynes, hard questions remain for the takeover target, and for its suitor.
“In our view, the key risk to this bid is the assumption around the earnings performance and debt levels,” Mr Kaynes said in a note for investors. in WHILE these two blokes may be characters from the comedy Bondi Hipsters, what they embody and how they behave paints an accurate picture of Australians who work in the media and marketing industry.
These two satirical ecoconscious hipsters from Bondi called Dom and Adrian enjoy expensive free-trade coffees, like to drink at small trendy bars and only eat organic gluten free bread.
New research released by ThinkTV has found that unsurprisingly, media professionals live in an ‘AdLand’ bubble with vastly different lifestyles and media consumption habits to normal Aussies.
The ‘AdNation’ report found that newspapers remain one of the most popular forms of trustworthy advertising among both normal Aussies and AdLand types.
Marketing academic Professor Karen Nelson-Field surveyed 1636 people working in Adland and compared them to 1016 normal Aussies to identify the differences and similarities between the two groups.
The survey found that AdLand types are younger than average Australians, love group exercise classes, are more likely to hang out at the beach, are less likely to have kids and can be found shopping at organic markets and independent grocers.
Meanwhile, the average Aussie spends roughly equal amounts of time accessing the internet to use social media, work and email and is more likely to have a lawnmower and a fly screen.
Mr Kaynes said the offer was based on numbers from Vocus’ latest forecasts for investors.
Given the magnitude of the telco’s last downgrade to its earnings outlook, rising costs and limited financial data, there were risks to the bid, he said.
He noted KKR had based its offer on a few assumptions.
Among them, it was assumed Vocus would meet its forecast for full-year earnings before interest, tax, depreciation and amortisation of $365 million to $375 million for the year to June.
The telco is scheduled to hold a briefing for investors next Wednesday.