Complications for Vocus NZX listing
AUCKLAND: The possible $700 million listing of Vocus’ local operation on the NZX is up the air, because its Australian owner could be bought out.
Vocus NZ, whose brands include Orcon and Slingshot, is New Zealand’s thirdlargest broadband provider and in line for a customer spike, having recently been named as Sky TV’s partner for its pending broadband service.
Vocus Group’s ASXlisted shares spiked 13% to $A4.94 on Monday after the company confirmed in a filing that it had received a nonbinding bid from Macquarie Infrastructure and Real Assets Management of $5.50 a share, valuing it at $A3.4 billion or a 25% premium over its previous price of $A4.38.
Complicating matters further, there has been speculation in the Australian business press that Infratil and Brookfield, who teamed to buy Vodafone NZ in 2019, heading off its NZX listing, could also be in the frame.
That combo could face regulatory pushback, however. Infratil is itself the subject of a buyout offer from AustralianSuper.
MIRA’s plans for Vocus Group are unknown, though it is thought likely it will break up the telco, which has a mix of wholesale and retail operations. The process could still involve an IPO for Vocus NZ.
But as things stand, MIRA (which is a division of ASXlisted Macquarie Group) has yet to look at Vocus’ books, and the statement says there is no guarantee a binding bid will follow.
The MIRA bid comes as ASXlisted Vocus Group was to begin a nondeal roadshow in about three weeks to promote an IPO for its New Zealand operation.
If it still goes ahead, the listing is most likely to occur on this side of the Tasman, for a clean break. Vocus’ local business is valued at around $A700 million ($NZ722 million).
Vocus’ New Zealand assets include retail internet service providers Orcon, Slingshot and Flip (bought from CallPlus for $250 million in 2016); Stuff Fibre (bought from Nine this year in a deal referenced at $8 million in a Vocus filing); the nationwide fibre network formerly owned by FX Networks (bought in 2014 for $116 million), data centres formerly owned by Maxnet (bought in 2012 for $10 million and since upgraded) and small power retailer Switch Utilities.
In a busy few months, Vocus NZ has bought Stuff Fibre, relaunched its budgetpriced Flip brand, become the only major player to support Chorus’ Hyperfibre product, expanded its partnership with Google, and revealed it will be the partner for Sky TV’s soontolaunch Sky Broadband service.
The Stuff Fibre acquisition bumped Vocus’ New Zealand subscriber base up 10% to around 226,000, putting Vocus well ahead of 2degrees and Trustpower in fixedline broadband. Vodafone NZ has around 420,000 subscribers and Spark around 700,000.
For its 2020 financial year, Vocus Group reported that revenue for its New Zealand operation rose 6% to $NZ398.8 million for the year to June 30, while ebitda rose 4% to $65.4 million.
It was the New Zealand operation’s fifth straight year of operating earnings growth, helping to explain the apparent expectation of its IPO at a market cap of $A700 million, a substantially higher valuation than when Vocus tried to sell its NZ business in 2018. — The New Zealand Herald