Vocus to float its New Zealand operation
ASX-listed Vocus has revealed plans to float its New Zealand business, most likely on the NZX.
The business includes internet service providers Orcon, Slingshot and Flip (bought from NZ’s CallPlus for $250 million in 2016), Stuff Fibre, the fibre network formerly owned by FX Networks, a data centre formerly owned by Maxnet and small power retailer Switch Utilities.
Goldman Sachs, Jarden and Craigs will be joint lead managers.
The telco does not name an exchange in its filing, but the Herald understands from a well-placed source in the broking community that it will buck the recent trend and list on the NZX — and the NZX only.
Vocus did not give timing, but said further details will be offered when its first-half result is reported in February. The Herald understands things will move quickly, with an investor roadshow in the New Year.
Vocus NZ recently reported FY2020 revenue that rose 6 per cent to $398.8m for the year to June 30, while ebitda rose 4 per cent to $65.4m.
It was the NZ operation’s fifth straight year of operating earnings growth.
With around 225,000 customers, Vocus NZ is our third-largest fixedline broadband operator, behind Spark ( around 700,000 customers) and Vodafone (420,000), and ahead of 2degrees (120,000) and Trustpower (110,000).
With its formal market filing, Vocus becomes the second major overseas telco to moot a float of its NZ business, following Vodafone — whose IPO of its local operation was ultimately headed off by a trade-sale to Infratil and Brookfield Asset Management.
Could the same happen again? Vocus put its NZ assets up for sale in late 2017 in a bid to pay down debt.
Trustpower and 2degrees were said to be on the shortlist of buyers.
Then Spark chief executive Simon Moutter also publicly mused about a bid, saying it could be saleable to the Commerce Commission if the bulk of Vocus customers were migrated to fixed wireless (the Herald understands the Vocus board saw his logic but thought the regulatory approval process would be too protracted).
Both were said to have made bids short of the asking price, which was never made public but said to be north of A$500m.
After the 2017/2018 sales process collapsed, Vocus flirted with a series of private equity players who were interested in Vocus’ NZ operation or its business as a whole, but again offers fell short.