AGL En­ergy hit over Vo­cus bid

Mercury (Hobart) - - BUSINESS - • SUPRATIM ADHIKARI and BRID­GET CARTER

WED­NES­DAY, JUNE 12, 2019 the­mer­cury.com.au SUB­SCRIP­TIONS 1300 696 397 AL­MOST $1 bil­lion has been stripped from the mar­ket value of Aus­tralia’s big­gest power re­tailer af­ter it an­nounced it was mak­ing a fresh tilt for a ma­jor telecom­mu­ni­ca­tions com­pany.

Shares in AGL En­ergy tum­bled 7.2 per cent yes­ter­day af­ter it lobbed a takeover pro­posal for Vo­cus, the group be­hind brands in­clud­ing Dodo and iPrimus.

Vo­cus de­clared it had opened its books for scru­tiny by AGL, which has pro­posed splash­ing $3 bil­lion for the tar­get com­pany.

It comes af­ter a Swedish pri­vate eq­uity house that was cir­cling Vo­cus last week gave up on its pur­suit of the telco af­ter a quick-fire dive into its books.

The in­vest­ment com­pany, EQT, had pro­posed pay­ing $5.25 for each share in Vo­cus – valu­ing the group at $3.3 bil­lion – but soon re­treated. It wanted to cut its of­fer price to $5 a share fol­low­ing the due diligence process.

AGL, in an in­dica­tive and non-bind­ing of­fer, is now propos­ing to pay $4.85 for each Vo­cus share.

Shares in the en­ergy group slumped $1.51 to $19.40 yes­ter­day as in­vestors re­acted with cau­tion, wip­ing $990 mil­lion from AGL’s mar­ket cap­i­tal­i­sa­tion.

AGL had told the mar­ket last month that it had pre­vi­ously ap­proached Vo­cus about a po­ten­tial buy­out but they had been un­able to agree on due diligence terms.

The elec­tric­ity and gas com­pany had pitched its ear­lier of­fer at about $4.80 a share.

It will have four weeks to scru­ti­nise the telco’s ac­counts ex­clu­sively as they try to agree on terms for a buy­out.

RBC Cap­i­tal Mar­kets an­a­lyst James Nevin said there “could be strate­gic value in adding data pro­vi­sion to AGL’s of­fer­ing as in-home de­vices be­come more con­nected and cus­tomers look to con­trol en­ergy us­age”.

But Mr Nevin warned that “ac­quir­ing data in­fra­struc­ture is a big step away from the core (AGL) busi­ness and car­ries sig­nif­i­cant risks”.

Vo­cus shares per cent to $4.17. jumped

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