Vocus ends takeover talks with KKR, as FY profit hit by AUD 1.5 bln impairment

All takeover discussions between Australian operator Vocus and KKR have ceased, with the US investment house saying it is unable to come out with terms acceptable to the Vocus board. KKR made a bid in June for the company at AUD 3.50 per share. Vocus then received another takeover offer from private equity group Affinity, in July. Giving its preference to KKR, Vocus provided the investment firm with the opportunity to conduct due diligence on a non-exclusive basis but the parties were unable to reach a mutually acceptable deal. 

Vocus believes it is in a good position for any sales process given its new outlook for full-year 2018, which sees revenue and underlying EBITDA up from the year before to AUD 1.9-2 billion and AUD 370-390 million, respectively.

For full-year 2017, the preliminary underlying EBITDA came in within the company's lowered expectations, at AUD 366.4 million. The underlying net profit after tax at AUD 152.3 million was less than expected, hit mainly by net finance costs and a higher effective tax rate. 

The company also said it was hit by a one-off non-cash impairment of AUD 1.532 billion, across both its Australian (AUD 1.33 billion) and New Zealand (AUD 199 million) operations. The company confirmed that its net debt position at the end of June was in line with forecast at AUD 1.029 billion. Vocus said it will continue to focus on executing its strategic plan and transformation programme. 

The company will report its final FY17 results on 23 August.