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EQT will not acquire Vocus

EQT will not acquire Vocus

Decision comes after "accelerated" due diligence period

Kevin Russell (Vocus)

Kevin Russell (Vocus)

Credit: Vocus Group

ASX-listed Vocus has announced EQT decided not to acquire the Australian telecommunications provider following an accelerated period of due diligence.

In late May, Vocus announced it had received a $3.3 billion acquisition proposal from private equity firm EQT Infrastructure.

The indicative proposal was non-binding and as Vocus reiterated to shareholders on 4 June, there was no certainty it would result in a binding offer.

Vocus said that the discussions with EQT have now ceased.

“As we said in our Interim Results on 27 February, we are in the early stages of a business turnaround," Vocus CEO and MD Kevin Russell said. "We have great confidence that our strategy will deliver significant value to our shareholders in the medium to long term.

"There is growing demand for our strategically valuable network assets and we have a substantial opportunity to gain market share in Vocus Networks, which is the core of our business."

Days after Vocus announced the EQT acquisition proposal, it confirmed that AGL Energy was considering acquiring the telco as reported by the Australian Financial Review.

In a document filed with the ASX, the energy provider said it had recently contacted Vocus with a confidential, non-binding offer in order to access due diligence materials and decide whether to make a binding offer. AGL later withdraw its offer after being "unable to agree to due diligence terms that were acceptable".

In July 2017, Vocus found itself at the centre of a bidding war after the company received an acquisition proposal from Asian private equity firm, Affinity Equity Partners.

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

Vocus is in the middle of a class action over allegations that it misled shareholders within its FY17 financial guidance. At the time, Vocus released unaudited results for the 2017 financial year, bringing in a net profit after tax (NPAT) of $152.3 million, way below the company’s guidance range of $160 million to $165 million.

According to the Australian telco, this downgrade was primarily due to higher than forecast net finance costs and a higher effective tax rate at 33.4 per cent.

 


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