Menu
Vocus bidders bow out of takeover talks

Vocus bidders bow out of takeover talks

All discussions with the bidders have ceased

The two private equity firms that had been engaged in a bidding war for Vocus Group (ASX:VOC) have bowed out of the race for the Australian telco.

Vocus found itself at the centre of a bidding war in July, after receiving an acquisition proposal from Asian private equity firm, Affinity Equity Partners.

Just a month earlier, Kohlberg Kravis Roberts & Co (KKR) revealed plans to acquire Vocus Group, with the US-based private equity firm tabling a $2.1 billion buyout proposal.

Revealed via a statement to the Australian Securities Exchange (ASX), terms of the proposal would have seen KKR acquire 100 per cent of shares in the telco giant, at a price of $3.50 per share.

Now, the publicly-listed company has told its shareholders that although the bidders indicated support for Vocus’ management’s strategic plans and transformation program throughout the due diligence process, both bidders have now advised that they are “unable to support a transaction on terms acceptable to the board”.

All discussions with the bidders have now ceased.

“The board’s focus continues to be to act in the best interests of all shareholders,” Vocus chairman, David Spence, said.

“Following the receipt of the initial, indicative proposals from the two parties, the company believed it was in shareholders’ best interests to grant those parties the opportunity to conduct non-exclusive due diligence.

“Throughout this process the company continued to pursue its standalone business plans and its transformation program outlined at the company’s recent investor day in June.

“The process with the bidders has now concluded and the board is looking forward to working with management to deliver improved returns for shareholders over the medium and long-term future,” he said.

According to Vocus, an important factor in its determination to conclude the sale process is the company’s FY18 outlook, which forecasts further revenue growth to between $1.9 billion and $2 billion and underlying pre-tax earnings (EBITDA) growth to between $370 million to $390 million.

“This forecast growth is in spite of the headwinds created by the deferred subscriber acquisition cost benefit to EBITDA of approximately $41 million in FY17,” the company said.

“Notwithstanding the competitive market conditions, and the increased costs associated with the migration of customers to the NBN [National Broadband Network], the board is confident that the company can deliver a return to sustainable organic growth following a year of transition in FY17,” it said.

News of the bidders’ exit from ongoing negotiations with Vocus comes just days after the release of its preliminary, unaudited financials for the 2017 financial year, which revealed a net profit after tax (NPAT) tally that comes in $152.3 million below the company’s guidance range of $160 million to $165 million.

This closely followed the $100 million the company wiped off its revenue target for the financial year ending 2017, blaming the forecast downgrade on lower than expected billings in its enterprise and wholesale business, and re-jigged terms on a number of large projects.

At the time of publication, Vocus' shares were trading at $3.22.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags TelcoVocuskkrAffinity Equity Partners

Featured

Slideshows

The making of an MSSP: a blueprint for growth in NZ

The making of an MSSP: a blueprint for growth in NZ

Partners are actively building out security practices and services to match, yet remain challenged by a lack of guidance in the market. This exclusive Reseller News Roundtable - in association with Sophos - assessed the making of an MSSP, outlining the blueprint for growth and how partners can differentiate in New Zealand.

The making of an MSSP: a blueprint for growth in NZ
Reseller News Platinum Club celebrates leading partners in 2018

Reseller News Platinum Club celebrates leading partners in 2018

The leading players of the New Zealand channel came together to celebrate a year of achievement at the inaugural Reseller News Platinum Club lunch in Auckland. Following the Reseller News Innovation Awards, Platinum Club provides a platform to showcase the top performing partners and start-ups of the past 12 months, with more than ​​50 organisations in the spotlight.​​​

Reseller News Platinum Club celebrates leading partners in 2018
Meet the top performing HP partners in NZ

Meet the top performing HP partners in NZ

HP has honoured its leading partners in New Zealand during 2018, following 12 months of growth through the local channel. Unveiled during the fourth running of the ceremony in Auckland, the awards recognise and celebrate excellence, growth, consistency and engagement of standout Kiwi partners.

Meet the top performing HP partners in NZ
Show Comments