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

Events

Featured

Slideshows

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

This exclusive Reseller News Exchange event in Auckland explored the challenges facing the partner community on the cloud security frontier, as well as market trends, customer priorities and how the channel can capitalise on the opportunities available. In association with Arrow, Bitdefender, Exclusive Networks, Fortinet and Palo Alto Networks. Photos by Gino Demeer.

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security
Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomed 2019 inductees - Leanne Buer, Ross Jenkins and Terry Dunn - to the fourth running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing face of the IT channel ecosystem in New Zealand and what it means to be a Reseller News Hall of Fame inductee. Photos by Gino Demeer.

Reseller News welcomes industry figures at 2020 Hall of Fame lunch
Show Comments