AGL has become the second potential suitor in less than a month to step back from acquiring Vocus, six days after flagging its intention to take over the telco.
In a statement to investors on Monday morning, the energy company said it would be ceasing due diligence on Vocus Group and withdraw its $3 billion takeover proposal.
AGL managing director and chief executive Brett Redman was quick to point out that the power provider was “no longer confident” the addition of data insights from telco customers would be worth proposed price tag.
Earlier this month, Swedish private equity firm EQT also backed away from a potential $3.27 billion takeover a week after announcing its interest in the telco.
After EQT pulled out, AGL was granted “exclusive access to conduct due diligence on Vocus... for a period of four weeks”.
AGL's broad focus has been on exploring investment opportunities in three main focus areas, Redman said: “optimising our existing portfolio for performance and value, evolving and expanding our core energy markets offerings, and creating new opportunities with connected customers”.
“We believe there will be material opportunities for AGL as energy and data value streams continue to converge and the traditional energy sector accelerates its transformation,” he said.
“The approach to Vocus reflected our view that the Vocus asset base has attributes that could support the execution of this strategy and benefit our customers.
“However, we are longer confident that an acquisition of Vocus at the proposed terms would represent sufficient certainty of creating value for AGL shareholders.”
Redman thanked Vocus management and its board for their assistance in the recent weeks.
Vocus CEO Kevin Russell responded to the news by reminding shareholders the telco is attempting to pull off a “three-year turnaround”.
“We have great confidence that our strategy and ability to execute our business plan 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 for Vocus Networks to gain market share.”
However, CommSec is reporting the telco’s shares have slumped 30 percent after AGL withdrew its offer.