Vocus confirms buyout offer — at a big premium

Vocus has confirmed it is subject to a buyout offer — and one that represents a big premium on its Friday closing price.

Swedish-based multinational private equity outfit EQT Infrastructure has made a bid of A$5.25 in cash per share, the company said in a statement to the ASX, valuing the telco at $A3.3 billion ($5b).

Vocus closed Friday at A$3.89, valuing the company at A$2.42b. As the bell rang after the announcement, the stock jumped to A$4.84.

Yesterday industry scuttlebutt said the deal could reanimate plans to spin-off Vocus’ NZ operation, which includes Orcon and Slingshot.

Vocus’ board, which includes the head of its NZ operation, Mark Callander, would only say that after receiving the proposal, it granted EQT non-exclusive access to conduct due diligence. The process is expected to take several weeks.

The news comes amid something of an Australasian telco deal frenzy, with Infratil and Brookfield’s attempt to take over Vodafone NZ, and TPG’s attempt to merge with Vodafone Australia across the ditch.

In mid-2017, US private equity outfits KKR and Affinity Partners both offered A$3.50 a share for Vocus, valuing the telco (then with a market cap of around A$1.7) at A$2.2b.

The offer was rejected, but Vocus did put its NZ assets — including Orcon, Slingshot, Flip 2Talk, power retailer Switch, data centres and the fibre network it bought from FX Networks — up for sale.

But in April 2018, Vocus NZ was pulled from the market. The asking price — never publically revealed — was said to be too rich for short-listed buyers Trustpower and (in partnership with private equity), 2degrees.

Vocus NZ has around 200,000 customers, making it the third largest broadband provider after Spark (680,000) and Vodafone (430,000) and twice the size of Infratilcontrolled Trustpower and 2degrees in the landline market.