IT’S STILL A JOKE, AND IT’S STILL NOT FUNNY

WHO exactly “elected” Vocus, its directors, management and staff, and shareholders to be the rolling butt of “let’s play share market April Fool”? Albeit, in May and June?

In rapid succession, we’ve had two corporate pranksters announce a possible takeover offer for the telco network group; and then in each case, just barely a week later, effectively shout “April Fool”, we were only kidding!

First, it was the guys from Stockholm, a city not particularly known as Comedy Central.

They dangled the prospect of paying Vocus holders a rather lush $5.25 a share – a price not seen since 2016, when Vocus was in the middle of its long slide from a $9 share price to bouncing off the bottom at $2.32.

That offer sent the share price rocketing straight to $4.68. Then a week later came the “April Fool”; the Swedes headed back chortling to Stockholm and the price plunged to $3.73.

Seizing their opportunity, in came the guys from AGL. They took their opportunity to pitch their joke offer at just $4.85. Once bitten, just a little bit shier, the Vocus share price responded accordingly – only going up to $4.30. Investors should have been a lot shier.

The guys from Sydney – while not a city known globally for its comedy, it does have a proud record of making a joke of governance, in both the corporate and political

spaces – shouted their “April Fool” in less than a week.

And the Vocus share price promptly tanked for the second time in barely a fortnight. It fell by a third, all the way down to $2.94. After all, Vocus was beginning to smell like the 21st-century corporate version of Typhoid Mary.

By the close, though, the share price had kicked up, to be down “just” 25 per cent on the day to $3.29. Maybe they reasoned the joke’s been played twice, why not a third time?

After all we’ve had Swedish private equity people; then an energy company; surely the list of other CEOs and other corporates, getting a rush of blood to the head, is almost literally endless?

You could put – more accurately, fantasise about putting – a fibre telco network business together with just about anything. Until, the blood subsided from your overheated CEO brain.

Maybe a retailer? Why not a resources group? A bank? Who knows: a casino company down on its, ahem, luck? A toll road operator? Nah, scratch them; there’s not a whiff of monopoly profit anywhere in the Vocus portfolio.

The first thing to be said about the two withdrawals is that they tell us that the two “offers” should never have been made.

Unless the board and management of Vocus are lying to shareholders and to the market, neither EQT (the Swedes) nor AGL could have found any great surprise inside Vocus when they got to do their insider due diligence.

We know exactly what Vocus is, because it told us in great detail in its interim report. We know exactly what its profit is, both actual and pending – and prospective – as it repeated those numbers (for the June year about to finish) yesterday, unchanged from when given four months ago.

All this and more will be outlined in detail in Vocus’s strategy update in two weeks. It will be hard to justify any claim that due diligence had thrown up not just surprises but offercrushing calamitous-level surprises.

What we have seen is two very different potential buyers carry out some form of road-testing the profitability of a corporate play and/or – especially in AGL’s case – a major strategic realignment “inside the Vocus tent, so to speak.

Maybe both the ACCC and ASIC should have a good hard look at what’s just happened. If people want to play April Fool in May and June; that’s fine. But the joke should be on them in July and August.