Shares in Vocus Group surged 20% at one stage on Monday after it confirmed market rumours it had received a takeover offer.
The indicative $3.5 billion offer emerged from Macquarie Infrastructure and Real Assets Holdings (MIRA).
The fibre and network firm said the confidential non-binding, indicative proposal from MIRA is at $5.50 per share – 25% premium on Friday’s close of $4.83.
The shares ended up 12.7% at $4.94.
The huge discount to the suggested offer prices tells us that not too many investors think the deal will happen and that there is no sign of any counter offers at this stage.
Vocus had two bids in 2017 which went nowhere and another two bids in 2019 which collapsed quickly.
“The Board has concluded that it is in the best interests of Vocus shareholders to explore the potential for a transaction with MIRA, and has granted MIRA due diligence access to enable MIRA to potentially put forward a binding proposal,” the telco said in a statement to the ASX.
MIRA is aiming to acquire 100% of the shares of Vocus via a scheme of arrangement.
Vocus has appointed Credit Suisse as its financial advisor and Allens as its legal advisor. The company said it will update the market in line with continuous disclosure obligations.
Vocus had a number of suitors in 2019 and 2017, receiving offers from infrastructure investment firm EQT Infrastructure, energy firm AGL and private equity firms Kohlberg Kravis Roberts and Affinity Equity Partners.
KKR and Affinity both offered around $2.2 billion in 2017, both of which were rejected by Vocus which citing a forecasted financial turnaround and return to sustainable organic growth at the time.
In 2019, EQT Infrastructure offered $3.26 billion, or $5.25 a share, but the offer collapsed after just a few weeks. AGL offered a lower offer of $3 billion or $4.85 a share, but was that was also dropped less than a week later.
The proposed offer is subject to the usual conditions including satisfactory completion of due diligence by MIRA, the securing of debt financing, unanimous recommendation by the Vocus board, and entry into a mutually acceptable scheme implementation agreement.
Furthermore, any scheme implementation agreement would also be subject to a number of conditions. These include shareholder, court, and regulatory approvals. They are also standard for bidding situations.
