AGL mounts $3bn takeover bid for Vocus
AGL has been granted exclusive access to conduct due diligence on a takeover offer after submitting a non-binding $4.85 per share proposal.
The company had previously submitted a confidential, non-binding offer, but withdrew the proposal last month after being unable to agree to due diligence terms.
European private equity company EQT Infrastructure had simultaneously been pursuing a $5.25 per share takeover, but backed out of the running during the due diligence process.
Vocus owns more than 30,000 kilometres of terrestrial fibre in Australia, and owns and operates 23 data centres in Australia, New Zealand and the Philippines. The company is also an nbn retail service provider with an around 7% market share.
While announcing its takeover proposal, AGL Energy said it sees the potential for significant customer loyalty and operating cost benefits by developing a multi-product energy and data offering — which could also have the benefit of increasing the company’s attractiveness to potential large enterprise customers.
The proposed merger is also motivated by the “opportunity to accelerate untapped growth potential in Vocus’s high-quality broadband fibre infrastructure network”, as well as the benefits of Vocus’s data centre business to AGL’s wholesale electricity generation portfolio.
AGL said it expects the merger to be earnings per share accretive in the first 12 months post acquisition.
But the market appeared unimpressed by AGL’s offer. AGL shares were trading 6.8% lower at $19.48 as of around 2.30 pm on Tuesday, the day the non-binding offer was disclosed. Vocus shares grew 8% to $4.14 over the same period.
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