Bidders drop out of race for Vocus

The two companies circling troubled telco Vocus have both dropped plans for a buyout after failing to reach “acceptable” terms.

Vocus has been shopping itself for several months following twin profit downgrades, the last of which was the result of duplicated costs and a failure to realise efficiencies following several acquisitions.

Private equity firm Kohlberg Kravis Roberts entered the race for Vocus in June, and was joined by Affinity Equity Partners in July.

Both offered $2.2 billion and were afforded an opportunity to conduct due diligence on the telco.

But Vocus said in a statement today that neither was able to “support a transaction on terms acceptable to the board”.

“Accordingly, all discussions have now ceased,” the telco said.

Vocus said an “important factor in the board’s determination to conclude the sales process” was forecast financial fortune and the promise of “a return to sustainable organic growth following a year of transition in FY17".

The telco is due to hand down its FY17 results on Wednesday and said it would provide further commentary on its outlook then.