New of­fer for Vo­cus

Asian firm joins US gi­ant in bid for Aus­tralian telco

Townsville Bulletin - - NEWS -

ASIAN pri­vate eq­uity firm Affin­ity Eq­uity Partners has tapped into a $ 2.2 bil­lion bidding war for Aus­tralia’s fourth­biggest telecom­mu­ni­ca­tions com­pany, Vo­cus Group, ri­valling a sim­i­lar of­fer from the US.

Vo­cus, which has rapidly ex­panded through a se­ries of merg­ers and ac­qui­si­tions, said Affin­ity put for­ward a $ 3.50 a share in­dica­tive and non- bind­ing pro­posal late on Mon­day.

In­vestors took a lik­ing to the news and sent Vo­cus shares up 2.6 per cent to $ 3.54.

The new bid comes less than a week af­ter Vo­cus opened its books for non- ex­clu­sive due dili­gence by US pri­vate eq­uity gi­ant Kohlberg Kravis Roberts, which in June of­fered a sim­i­lar $ 3.50 a share takeover pro­posal.

The tele­com provider said its board had de­cided to also al­low Affin­ity to con­duct due dili­gence on a non- ex­clu­sive ba­sis, in or­der to es­tab­lish whether an ac­cept­able trans­ac­tion could be agreed.

“The pro­posal is sub­ject to due dili­gence and con­di­tional on a num­ber of other mat­ters sub­stan­tially sim­i­lar to those in the KKR pro­posal,” Vo­cus said in a state­ment.

“The in­ter­ests of share­hold­ers will be best served by a for­mal process to thor­oughly eval­u­ate whether a change of con­trol of­fer, at a price and on terms that the board would rec­om­mend, can be se­cured.”

Vo­cus’ management has grap­pled with a rush to ex­pand that be­gan in De­cem­ber 2014 with a $ 1.2 bil­lion Am­com merger, fol­lowed by a $ 3.8 bil­lion merger with M2 Group and Oc­to­ber’s $ 807 mil­lion ac­qui­si­tion of Nextgen.

In­vestors were shocked in May when the owner of in­ter­net providers dodo and iPrimus cut its an­nual guid­ance for a sec­ond time in six months, cit­ing a raft of prob­lems on the back of its rapid ex­pan­sion.

That news sent its shares tum­bling to a three- and- ahalf- year low of $ 2.35.

Vo­cus reaf­firmed its re­vised guid­ance in early June, with full- year un­der­ly­ing profit ex­pected to come in be­tween $ 160 mil­lion and $ 165 mil­lion.

Vo­cus said yes­ter­day it would not make any fur­ther an­nounce­ments un­less and un­til a rec­om­mended of­fer was se­cured, or if there was a devel­op­ment which re­quired dis­clo­sure.

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