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Internet service provider Vocus (ASX: VOC) has received a non-binding $3.3 billion takeover bid from private equity firm EQT Infrastructure.
The proposal would see EQT acquire all shares in Vocus for $5.25 per share, representing a significant premium to last Friday's closing price of $3.89.
The Vocus board has granted the bidder a non-exclusive period of due diligence which will enable the Stockholm-based company to put together a formal proposal. Vocus says this process is "likely to take a number of weeks".
The company has emphasised there is no certainty that due diligence will result in EQT launching a formal takeover proposal, and shareholders do not need to take action right now.
The proposal is subject to a number of conditions including the securing of financing, a recommendation from the Vocus board and entry into a scheme implementation agreement.
Shareholders, the regulator and the courts will also need to approve the deal.
If successful, EQT will take over one of Australia's largest ISPs and Internet infrastructure groups.
Vocus currently operates Australia's second largest inter-city network. The network is around 30,000 kilometres of fibre-optic cable supported by 4,600 kilometres of submarine cable connecting Singapore, Indonesia and Australia.
The company also operates ISP subsidiaries including Dodo, Slingshot, Orcon, ClubTelco, and more.
Vocus is currently facing shareholders in a class action lawsuit brought by Slater & Gordon.
The action relates to the company's FY17 earnings falling well short of guidance by around $64 million.
Citing heavy writedowns on goodwill for its acquisitions, the Sydney-based company went from a $64.1 million profit in FY16 to a whopping $1.47 billion loss the following year.
The disappointing result led the company withhold paying a dividend and prompted the resignation of former chairman David Spence.
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