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Vocus back on takeover radar as Macquarie lobs $3.4b offer

AGL Energy and Swedish private equity group EQT both pored over Vocus’ books in July 2019 before walking away from a deal. Meanwhile, Kohlberg Kravis Roberts and Affinity Partners also pitched bids worth $2.2 billion in 2017, with neither private equity player following through on their initial interest.

However, unlike the previous offers, Macquarie’s bid has landed as Vocus finds itself on much firmer footing, with Mr Russell telling shareholders last August that the business was picking up market share and growing its revenue. Vocus’ consumer business, which includes the Dodo and iPrimus brands, has also stabilised and started to pick up new customers.

The telco is also working on an initial public offering of its New Zealand operations, with the float expected to be completed before the end of the 2020-21 financial year.

Dion Hershan, head of Australian Equities at Vocus investor Yarra Capital Management, which owns a 6.7 per cent stake in the telco, expects Vocus’ management to take a good look at Macquarie’s offer.

“We feel it is appropriate that the board engages to learn more about the approach.”

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“The bid confirms the quality of the company’s assets and progress that the management team has made on the turnaround since 2018.”

“Vocus is performing well and has a number of growth options available to it. For example, there’s a lot of optionality as shown by the planned IPO in New Zealand, and telecom infrastructure assets like theirs are coveted in this low-interest environment,” Mr Hershan said.

Macquarie has other telecom infrastructure assets under its belt, including the wireless tower operator Axicom and data services company Air Trunk. Vocus’ significant fibre assets are seen by telco industry watchers as a good fit for Macquarie as the investment bank continues its pursuit of quality assets.

With over $9 billion in surplus capital at its disposal, Macquarie is looking to capitalise on the post-COVID market opportunities and telecommunications networks are shaping up as sound long-term assets for infrastructure investors.

Vocus’ management said on Monday that giving Macquarie access to its data room was in the best interest of its shareholders.

“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.“

“There is no certainty that the proposal will result in a binding offer for Vocus.”

Vocus has appointed Credit Suisse as its financial adviser and Allens as its legal advisor.

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