Macquarie Infrastructure and Real Assets Holdings (MIRA) has offered US$2.62 billion (AUD$3.42 billion) for Vocus, which equates to $4.14 a share (A$5.50).
As a result, shares in Vocus Group rose to their highest since November 2016, but fell to A$4.98 by midday as doubts around closing the deal emerged.
Finances have been an issue for Vocus Group since it acquired Amcom in 2015 and merged with M2 the following year in a A$62.25 million deal that created Australia's fourth largest telecommunications firm.
It last turned a profit in 2018, while in FY2019 it posted a 44% decline in NPAT and in FY20 recorded losses of $178.2 million.
The figures followed a year during which Vocus Network Services launched SD-WAN, cloud IaaS, Google Cloud, secure internet gateway, and three NBN products: Enterprise Ethernet, Internet, and Business Satellite. It also delivered the Coral Sea Cable System for the Australian Government.
The group is currently engaged in a three-year turnaround project, which it is hoped will transform its financial performance, however, takeover talks have failed on several occasions previously.
In 2017, KKR and Affinity Equity Partners entered negotiations and in 2019, Vocus received bids from EQT Infrastructure and AGL, which offered AU$5.25 and $4.85 per share respectively.
In a 2019 interview with the Australian Financial Review, chief executive Kevin Russell (pictured, who is now MD and CEO) said previous bids stalled because the group's turnaround plan was still in its early stages. This time things appears to be different and in December, Vocus said it would IPO Vocus New Zealand before the end of FY21 in Australia (end of June 2021).
In its statement to the Australian Securities Exchange (ASX), Vocus said of the latest bid: "The board has concluded that it is in the best interests of Vocus shareholders to explore the potential for a transaction with MIRA."
Referring to the previous bids that later failed, JPMorgan told Reuters: “We believe a situation like that happening again would be perceived very negatively, with investors likely questioning what within the company is driving interest away.
“While on the one hand, the actions by MIRA may elicit competing bids given the interest shown in Vocus in the past, there is clearly no guarantee that the process will lead to a full transaction.”
