The Vocus Group Ltd (ASX: VOC) share price will be on watch today after giving a takeover update.
What happened with the Vocus takeover?
A month ago, Vocus announced that it was the subject of a takeover offer.
Today, Vocus announced that it has agreed to the takeover offer with a consortium of Macquarie Infrastructure and Real Assets (MIRA) and Aware Super.
If the takeover goes ahead, then Vocus will receive $5.50 per share in cash, which is the same price that was mentioned in the indicative and non-binding proposal from MIRA a month ago.
This deal values the Vocus equity at $3.5 billion and an enterprise value of $4.6 billion. It also implied an enterprise value to EBITDA (EBITDA explained) multiple of 12 times for the year to December 2020.
The telecommunications business said that its board unanimously recommends Vocus shareholders vote in favour of the scheme as long as a better offer doesn’t come along. It also needs an independent expert to conclude that the takeover offer is in the best interests of Vocus shareholders.
The offer represented a 25.6% premium to the Vocus closing share price of $4.38 on 5 February 2021. It was also a 33.5% premium to the average share price over the prior three months.
Leadership comments
Vocus Chairman Bob Mansfield said: “The Vocus board is unanimous in our view that this offer is in the best interests of Vocus shareholders. In making this assessment, the Board considered a range of alternatives, including the execution of our existing strategy under which the proceeds of an IPO Vocus New Zealand would reduce debt and be invested in our core business. Feedback from our shareholders in recent weeks on the indicative offer of $5.50 originally received from MIRA has been overwhelmingly positive and there is a broad recognition that this is very fair value for Vocus shareholders.”
Kevin Russell, Vocus Managing Director and CEO, also said:
“In recent weeks, we have been able to confidently declare that Vocus’ three-year turnaround is complete and that we are moving into a new phase of investment. This transaction clearly validates that company’s strong operational and financial performance, and recognises that we are executing the strategy that we set out in 2018.
“A key part of the success of our turnaround strategy was the early establishment of Vocus’ three distinct business units – Vocus Network Services, Vocus New Zealand and Retail. The proposal…recognises that all three business units have been performing well, with Vocus Network Services winning market share, New Zealand well positioned for market consolidation opportunities and retail returning to growth in its customer business.”
Summary thoughts
Vocus shareholders are clearly happy with this offer and I can see why it was accepted, it’s a good price compared to where it has been since 2017.
I’d be happy to sell my Vocus shares today, if I had any. It has been a month since the first bid was announced, so you’d think another bidder would have appeared by now.
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