Vocus, Amcom enter due diligence over merger

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Vocus, Amcom enter due diligence over merger

Talks progress to final stages.

The potential merger of Vocus Communications and Perth-based Amcom has progressed to the due dilligence stage after Vocus last month took a 10 percent stake in Amcom while it gauged its rival's interest in the proposal.

Amcom last week said it remained in discussions with the data centre and communications provider about a takeover, but stressed that there was no certainty as to whether the discussions would result in a transaction.

Vocus today continued to warn a merger was not certain, but both businesses have now informed the Australian Stock Exhange that they have agreed to run due diligence on each other, to ensure finances have been acccurately reported during the initial talks.

“We are pleased with the constructive ongoing discussions with Amcom and remain committed to progressing this exciting transaction for the benefit of all stakeholders,” Vocus chief executive James Spenceley said in a statement.

The announcement comes just after Amcom announced it had significantly expanded its fibre assets by acquiring 180km of Megaport's fibre network for $15 million.

Megaport will lease back access to the network - which spans Melbourne, Sydney and Brisbane - under a 15-year agreement. Amcom also signed a 15-year access agreement with network operator FirstPath.

The purchase will allow it to service an extra 5000 customers, the company estimates, and will give Amcom access to 17,000 buildings, 30 data centres (plus a future further 18), and around 30 NBN points of interconnect across the three cities.

Vocus owns around 600km of fibre in metropolitan areas of the country and over 4200km of fibre in New Zealand.

The negotiations could be affected by the entrance of telecommunications provider TPG into the fray - the company last week announced it would increase its stake in Amcom to "in excess of five percent".

The move makes TPG a substantial shareholder in Amcom, but the company told investors at the time of its announcement that it had "no specific intention regarding Amcom other than to own shares as a strategic investment".

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