AGL Energy had earlier considered making a takeover offer for Australian operator Vocus. However, the non-binding offer was withdrawn after the companies could not reach agreement on the terms for conducting due diligence.
At the beginning of June, Vocus terminated discussions with Swedish private equity firm EQT Infrastructure. On 27 May, Vocus received an from EQT to acquire all of the shares in Vocus at a price of AUD 5.25 per share in cash. Following an accelerated period of due diligence, EQT decided not to proceed with the transaction outlined in the indicative proposal.
AGL says its interest in Vocus is consistent with AGL’s strategy to serve increasingly connected customers as energy and data value streams converge and the traditional energy sector transforms. AGL believes acquiring Vocus may help it execute this strategy, creating material shareholder value and driving customer loyalty while providing access to an integrated broadband fibre asset base.
The potential transaction is expected to create customer loyalty and operating cost benefits from the integration of the two companies’ customer platforms and development of a multi-product offering across energy and data. The deal would also accelerate growth potential in Vocus’ broadband fibre infrastructure network and generate further incremental value from these assets as a result of a combination with AGL.
The platform provided by Vocus’ offering to enterprise, wholesale and government customers would upgrade AGL’s services offering for large volume customers through the provision of integrated data and energy services. The deal is also expected to develop new products and services for customers as energy and data products and services converge in the future. The planned transaction would blend Vocus’ data centre business with AGL’s wholesale electricity generation portfolio.
AGL plans to use existing cash and new debt facilities to fund the Vocus transaction. AGL’s initial assessment is that a transaction on this basis would be accretive to AGL’s earnings per share in the first 12 months post acquisition.
Discussions between AGL and Vocus are incomplete and there is no certainty they will lead to a binding agreement, Vocus said. Any entry into a binding transaction would remain subject to the completion of due diligence, negotiation of a mutually acceptable scheme implementation agreement, and the approval of both companies’ boards.
