AGL drops bid for Vocus
Shares in internet provider tumble as offer pulled
VOCUS shares have lost nearly a third of their value after AGL Energy abandoned a $3.02 billion takeover proposal less than a week after making a second offer for the internet provider.
AGL managing director and chief executive Brett Redman (pictured) said yesterday that the company was no longer confident the deal would create value for shareholders.
“The approach to Vocus reflected our view that the Vocus asset base has attributes that could support the execution of this strategy and benefit our Close Change customers,” Mr Redman said. “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.”
AGL shares rose 1.84 per cent to $19.93 by 4pm, while Vocus shares plunged 24.5 per cent to a near six-month low of $3.29.
AGL’s $4.85-a-share bid for the Dodo and iPrimus owner came less than a week after Swedish private equity firm EQT Infrastructure scrapped its own $3.3 billion takeover tilt at the Sydney-based firm.
AGL had already withdrawn a non-binding takeover offer prior to Vocus’ failed EQT negotiation.
Vocus chief executive Kevin Russell said in a release yesterday there remained growing demand for the company’s “strategically valuable network assets”.
“As we have repeatedly said, this is a three-year turnaround,” Mr Russell said.
“We have great confidence that our strategy and ability to execute our business plan will deliver significant value to our shareholders in the medium to long term.”
Mr Redman said last week that AGL viewed Vocus as giving it a leg-up in being able to offer new energy and datablended products.
Shares in AGL slumped on news of its approach for Vocus last week, with analysts questioning the value of the deal for the energy provider.
The company’s stock dropped 6.41 per cent last week to $19.57 before trade yesterday. Conversely, Vocus shares spiked on the new AGL approach, gaining 13.84 per cent for the week to $4.36 prior to yesterday’s open.
AGL this month said FY20 earnings would take a hit of up to $100 million due to trouble at a power station in Victoria. 12.46% 8.72% 4.87% 3.90% 2.99% 2.55% 2.18% Close Change
-1.07 -.07 -1.32 -.62 -.68 -.14 -.11 PctChange
24.54% 9.93% 6.11% 5.27% 4.85% 4.23% 3.97%