AGL Energy hit over Vocus bid
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