AGL pulls back on offer

Analyst says move into data provision for future

AGL withdrew a non-binding takeover offer for Vocus after failing to agree to due diligence terms with the internet provider, which has since become a $3.3 billion target of a Swedish private equity firm.

The owner of the iPrimus and Dodo brands this week granted non-exclusive due diligence access to EQT Infrastructure, which indicates AGL may have been seeking exclusive access to its books.

“AGL recently contacted Vocus with a confidential, nonbinding indicative offer, seeking access to due diligence materials so AGL could determine whether to make a binding offer for Vocus,” AGL said in a statement yesterday.

“AGL has now withdrawn this non-binding indicative offer after being unable to agree due diligence terms that were acceptable.”

The power generator and retailer added that it will continue to look for opportunities to “meet the needs of increasingly connected customers as energy and data value streams continue to converge”. Royal Bank of Canada analyst James Nevin said AGL could return to the table but that the attempted move into data provision had come more quickly than he had anticipated.

He called it “a big leap” for the energy infrastructure owner. “While we think there is going to be a natural progression for the utility industry to provide more in-home services and management of inhome devices and energy usage, we see this as an evolution over time that AGL can potentially manage organically,” Mr Nevin said.

“We would prefer to see AGL make the incremental steps along the path it laid out at its recent results rather than jumping to the end of that path through an acquisition.”

Vocus this week said Stockholm-based private equity firm EQT had made a non-binding indicative proposal of $5.25 for each share in Australia’s fourth largest telecommunications provider.

The offer represented a 35 per cent premium to the stock’s $3.89 valuation before the start of trade on the ASX yesterday.