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VOCUS Group (ASX: VOC) has received a takeover offer from private equity giant Kohlberg Kravis Roberts (KKR) which values the embattled telco at $2.18 billion.
The indicative and non-binding proposal aims to acquire 100 per cent of Vocus with a $3.50 per share offer which is now being assessed by an independent board committee to be headed by Vocus' independent chairman David Spence.
Vocus could now become the subject of a bidding war as the KKR offer represents a 22 per cent premium to VOC's last closing price but is well below the $9.24 it was trading at in May 2016.
Last month the company, which owns iPrimus and dodo among other assets, shocked the market with a profit warning that it was going to wipe $100 million off its revenue target.
That announcement sent shares into a 30 per cent freefall as the company blamed revenue delays on major project contracts and lower earnings from its recently launched New Zealand energy business.
However, Vocus' half year numbers for 2017 included a 400 per cent rise in revenue and a 95 per cent surge in statutory profit, and its current share price and potential value is the attraction for KKR.
The indicative proposal from KKR is subject to a number of conditions including due diligence, availability of finance and a unanimous recommendation from the Vocus board.
Other conditions include a clause that net debt for 30 June 2017 does not exceed $1.1 billion and full year EBITDA for the full year is in line with guidance of $365 million and $375 million.
Vocus has appointed Credit Suisse and Goldman Sachs as its financial advisors and Allens as its legal advisor.
The company, number 39 on our 2017 Top 50 Melbourne Companies list, also owns telecommunications networks in Australia and New Zealand and connects all capital cities and most regional cities in both countries which directly reaches more than 5,500 buildings.
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