Vocus receives $3.3 billion takeover offer

Vocus receives $3.3 billion takeover offer

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.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Looking for a credit or charge card that’s built for your business? Try American Express
Partner Content
A good credit card should work for you, not against you, and let you and your business ...
American Express
Advertisement

Related Stories

Mandatory COVID isolation to end nationally mid-October

Mandatory COVID isolation to end nationally mid-October

National Cabinet has today determined that mandatory isolation peri...

Bottoms up: Sydney cold brew coffee liqueur brand Mr Black acquired by beverage giant Diageo

Bottoms up: Sydney cold brew coffee liqueur brand Mr Black acquired by beverage giant Diageo

Fast-growing coffee liqueur brand Mr Black is joining a portfo...

Goodwill impairment blows out Toys“R”Us ANZ losses

Goodwill impairment blows out Toys“R”Us ANZ losses

The Australian operator of toys and hobbies brand Toys"R"...

Tritium teams up with JET Charge to create world’s longest EV highway in WA

Tritium teams up with JET Charge to create world’s longest EV highway in WA

Brisbane-based electric vehicle charger group Tritium DCFC (NASDAQ:...