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EQT proposes to acquire Vocus for $2.3 bn: shares jump 26%

EQT, Vocus, Australian telecom sector

EQT has offered to purchase all of Vocus’ outstanding stock at A$5.25 per share in cash

Swedish private equity firm EQT has offered to acquire Vocus, an Australian telecommunications group for A$3.3 billion ($2.3 billion), according to media reports. The decision comes as EQT explores more possibilities to strengthen its efforts in Australian buyouts.

Vocus confirmed in a statement to the Australian Stock Exchange that it has received a non-binding, indicative proposal from EQT to purchase all of its outstanding stock at A$5.25 per share in cash.  

The offer represents a 35 percent premium to Vocus’ closing stock price on Friday, the Financial Times reported. The company’s shares closed at A$3.89 each on Friday. However, the indicative proposal is subject to a slew of conditions, which include due diligence of EQT’s satisfaction, financing, unanimous support from the Vocus Board, and further on.

EQT has hired JP Morgan to advise on its Vocus bid.

According to Reuters, Paul Budde, independent telecom analyst, said, “It’s a great price.” After Vocus received the offer, its shares jumped by as much as 26 percent.

He added that in the last few years, the company was ‘struggling a bit’. However, the assets it holds are worthy enough.

“(The bid) is not necessarily for the business or the customers that they have … but that infrastructure is always something that is worthwhile and they have got quite a lot of it,” Budde concluded.

In 2017, Vocus had received offers from companies such as ohlberg Kravis Roberts and Affinity Equity Partners. Foad Fadaghi, managing director at Telsyte said that the entire telecom industry was ‘under pressure’.

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