AGL Energy tests $3bn price for Vocus

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AGL Energy tests $3bn price for Vocus

Back in the hunt.

AGL Energy is back in the hunt for telco Vocus with a non-binding $3 billion proposal on the table, pending the outcome of due diligence.

AGL was recently named as one of two potential suitors for Vocus but had been unable to agree to terms to conduct due diligence.

This has now changed with the utility saying in financial filings this morning that it has “been granted exclusive access to conduct due diligence on Vocus ... for a period of four weeks”.

The due diligence agreement followed receipt of a “non-binding, indicative proposal to acquire Vocus at $4.85 per share”.

“In the event Vocus announces or declares any dividend, AGL reserves the right to reduce its indicative offer price accordingly,” the utility said.

At $4.85 per share, the proposal values Vocus at a shade over $3 billion. Its current market cap is $2.38 billion.

AGL said its interest in Vocus could help it “meet the needs of increasingly connected customers as energy and data value streams converge and the traditional energy sector transforms.”

“Acquiring Vocus may be an optimal way of executing this strategy, creating material shareholder value and driving customer loyalty while providing access to a market-leading integrated broadband fibre asset base and creating considerable additional options for long-term growth,” it said.

AGL indicated that it hoped to “reinvigorate AGL’s value proposition to large volume customers through the provision of integrated data and energy services”.

It also saw Vocus’ data centre business as a potential growth engine when coupled with “AGL’s wholesale electricity generation portfolio.”

Vocus recently also courted a non-binding proposal from Swedish private equity group EQT Infrastructure that would have valued the telco at $3.27 billion.

However, EQT decided not to proceed about a week later following "accelerated due diligence".

Vocus also previously courted private equity buyout offers back in mid-2017 but was again unable to secure an acceptable price.

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