Telecommunications company Vocus has agreed to be acquired by a consortium of Macquarie Infrastructure and Real Assets (MIRA) and Aware Super for $3.5 billion.
Vocus’ board unanimously recommended that shareholders vote in favour of the acquisition unless a superior offer is made. The scheme meeting is set for sometime in June this year and the transaction is expected to close by July.
“The Vocus board is unanimous in our view that this offer is in the best interests of Vocus shareholders. In making this assessment, the board considered a range of alternatives, including the execution of our existing strategy under which the proceeds of an IPO of Vocus New Zealand would reduce debt and be invested in our core business,” Vocus chairman Bob Mansfield said.
“Feedback from shareholders in recent weeks on the indicative offer of $5.50 originally received from MIRA has been overwhelmingly positive and there is a broad recognition that this is a very fair value for Vocus shareholders.”
Vocus said the proposed $5.50 per share or $3.5 billion acquisition price is a 25.6 percent premium to the share price on 5 February 2021, the last business day before MIRA submitted its proposal.
The telco also announced it won’t proceed with its planned initial public offering for its New Zealand business following the acquisition.
Vocus managing director Kevin Russell said, “In recent weeks, we have been able to confidently declare that Vocus’ three-year turnaround is complete and that we are moving into a new phase of investment. This transaction clearly validates the company’s strong operational and financial performance, and recognises that we are executing the strategy that we set out in 2018.”
“A key part of the success of our turnaround strategy was the early establishment of Vocus’ three distinct business units – Vocus Network Services, Vocus New Zealand, and Retail. The proposal from Aware Super and MIRA recognises that all three business units have been performing well, with Vocus Network Services winning market share, New Zealand well positioned for market consolidation opportunities and Retail returning to growth in its Consumer business.
“Fibre is the critical infrastructure of the modern economy, and this arrangement endorses our view that Vocus’ secure, Australian-operated fibre network is key to our momentum in market. As we enter this new stage of investment and growth, support from MIRA and Aware Super will provide the strongest possible foundation for the business and the capacity to invest in our key assets and provide exceptional service to our customers."
The MIRA-Aware Super consortium was Vocus' fifth acquisition proposal since 2017, with this being the first time where both sides reached an agreement.
Private equity firms Kohlberg Kravis Roberts and Affinity Equity Partners both offered Vocus $2.2 billion in separate deals in 2017, which were eventually dropped as the telco pursued a turnaround effort instead.
Australian infrastructure investment firm EQT Infrastructure made an offer two years later for $3.26 billion, or $5.25 per share, but talks were cut short after a few weeks. Energy firm AGL offered a lower offer of $3 billion or $4.85 per share, which was also dropped less than a week later.