Second acquisition offer sparks bidding war for Vocus

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Second acquisition offer sparks bidding war for Vocus

A bidding war for Vocus Communications could be on the cards after the networking company received a second proposal for a takeover.

Last night, private equity firm Affinity Equity Partners put forward a bid to acquire all of Vocus' shares for $3.50 cash per share, valuing the company at $2.2 billion.

The offer is preliminary, indicative and non-binding, and would be subject to a number of conditions.

Affinity's bid is on par with the proposal from US private equity firm Kohlberg Kravis Roberts (KKR), which also offered to acquire Vocus for $2.2 billion last month.

Last week, Vocus opened up its books to KKR, allowing it to conduct due diligence to establish whether a takeover could be agreed upon. With today's announcement, the Vocus board of directors decided to give Affinity the same opportunity to conduct due diligence to decide whether to put forward a binding offer.

Affinity is headquartered in Hong Kong and operates in Australia through its Sydney office. The firm owns TEG, the parent company of Ticketek, and has investments in a number of other Australian companies like Velocity Frequent Flyer.

Vocus reminded shareholders that there was no guarantee that an "acceptable offer" would be put forward. The company said that the best interest of shareholders will "be best served by a formal process to thoroughly evaluate whether a change of control offer, at a price and on terms that the board would recommend, can be secured."

Vocus shares were trading at $3.45 each at the end of trading on Monday. The company's shares have fluctuated over the past year. Shares were valued at $8.43 each this time last year, until Vocus downgraded its profit in November, and again in May by another 20 percent.

The company expects revenues of $1.8 billion for the 2017 financial year and underlying EBITDA between $365 million and $375 million.

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