Vocus Group Received Indicative Proposal from EQT Infrastructure for a Proposed Acquisition

Specialist fibre network services provider Vocus Group Limited (ASX: VOC) has confirmed that it has received a confidential, nonbinding, indicative proposal from EQT Infrastructure to acquire all 100% shares in Vocus at a price of A$5.25 per share in cash via scheme of arrangement.

Following the release of this news, the share price of the company increased by 16.967% during the intraday trade as on 27 May 2019.

This indicative proposal is subject to various conditions which includes –

  • completion of due diligence to EQT’s satisfaction
  • unanimous recommendation from the Vocus Board
  • securing committed financing
  • and entry into a mutually acceptable scheme implementation agreement

Vocus Group’s Board has already granted non-exclusive due diligence access to EQT so that EQT can put a formal binding proposal to Vocus which is expected to take a number of weeks. The company has advised iVocus shareholders that at this point of time, they need not to take any action regarding the Indicative Proposal.

In the first half of FY19, the company reported revenue of $974.2 million which was 1% higher than the pcp. The company’s Underlying EBITDA decreased by 7% on the pcp to $176.4 million. Cash conversion in the period was strong at 98% and Capex decreased by 8% on the pcp as the business reviewed spending in the context of strategic opportunities for growth.

Group Financial Summary (Source: Company Reports)

The operating segments of the company were renamed during the period.

The five operating segments are-

  • Vocus Networks – Services (formerly Enterprise, Government & Wholesale),
  • Consumer Australia,
  • Business (formerly Commander),
  • New Zealand
  • Infrastructure, Operations and Group (formerly Group Services).

Vocus Networks is involved in providing telecommunications products and services to the enterprise and wholesale segments of the Australian market.  Consumer Australia is focussed on the value end of the consumer market which is offering various telecommunications products and services including broadband data, fixed voice and mobile services.

New Zealand division operates across all key segments of the market in New Zealand including Business, Government, Wholesale and Consumer.

Vocus’ Infrastructure, Operations and Group function includes the Australian Network & Technology function that manages the Group’s Australian infrastructure and IT assets.

Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $4.550, up by 16.967% during the day’s trade with a market capitalisation of ~$2.42 billion as on 27 May 2019. The counter opened the day at $4.860 and reached the day’s high of $4.900 and touched a day’s low of $4.530 with a daily volume of ~ 20,081,551. The stock has provided a year till date return of 26.71% & also posted returns of 17.88%, 8.66% & -1.27% over the past six months, three & one-month period respectively. It had a 52-week high price of $4.900 and touched 52 weeks low of $2.210, with an average volume of ~ 1,905,533.


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