The VOCUS GROUP LIMITED [ASX:VOC] share price experienced a 22% rise today, following the announcement of a takeover offer from Swedish private equity giant, EQT Partners.
Under EQT’s proposal, the Australian telco will receive $5.25 a share by a scheme of arrangement, The Australian reports — resulting in a sale of $3.3 billion.
Currently, the telco is trading at $4.55 a share.
What the sale means for Vocus
The sale is no doubt exciting for Australia’s fourth-largest telco.
The takeover is expected to unfold over a number of weeks, as due diligence to EQT is carried out. Additionally, committed financing will need to be secured, and a unanimous recommendation from the Vocus board will need to be acquired. Because of the various precautions, Vocus advised their shareholders that no immediate action would need to be taken.
EQT is best known for the sale of medical imaging and radiology group, I-MED, which sold for $1.25 billion in 2018. Before making the offer to Vocus, they attempted to acquire aged care business Allity, but decided otherwise.
Previously, Vocus had received offers from private equity firms, Kohlberg Kravis Roberts and Affinity Equity Partners in 2017. However, although the offers were attractive, significant changes to the business were necessary.
Since the previous offer, Vocus has undergone a significant management changeover, and is recovering from an unsuccessful merger with M2 Communications — completed in 2016 for $3.8 billion.
What’s so great about Vocus?
Whether you’ve heard of them or not, they’re an attractive stock. Their competitive pricing for mid-sized companies makes them a serious rival to Telstra, and an attractive customer to the government market. Their most prized asset, being their fibre infrastructure, stretches across the Eastern cities and Western Australia — attracting customers in both the enterprise and wholesale market.
And as we enter into a new age of telco, Vocus could be one to watch closely.
If all goes to plan, this could be an exciting development for Vocus. We’ll be watching closely over the next few weeks as the proposal begins to unfold.
For Money Morning
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