Home > Industry > Affinity Joins KKR, Setting Off Bidding $2bn War For Vocus

Affinity Joins KKR, Setting Off Bidding $2bn War For Vocus

Hong Kong-based equity company Affinity has thrown down the gauntlet with a $2.2 billion offer for embattled Aussie telco Vocus. The bid for Australia’s fourth-biggest telecommunications company comes less than a week after it opened its books to Kohlberg Kravis Roberts (KKR).

“The board of Vocus now considers that the interests of shareholders will be best served by a formal process to thoroughly evaluate whether a change of control offer, at a price and on terms that the board would recommend, can be secured,” Vocus said.

Vocus is being advised by Credit Suisse and Goldman Sachs, while UBS is working with KKR. Affinity’s indicative offer of $3.50 a share came after the market closed on Monday.

The company yesterday told shareholders that the new proposal is subject to due diligence and is conditional on a number of other matters, substantially similar to those in the KKR proposal.

It has granted Affinity the same opportunity as KKR to conduct due diligence to establish whether an acceptable binding transaction can be agreed.

Vocus’ management has grappled with rapid expansion that began in December 2014, with a $1.2 billion Amcom merger, a $3.8 billion merger with M2 Group and October’s $807 million acquisition of Nextgen.

Investors were shocked in May when Vocus, as owner of Internet providers Dodo and iPrimus, cut its annual guidance for a second time in six months, citing a raft of problems on the back of its rapid expansion. In June the company said full-year underlying profit was expected to come in at $160-$165 million.

Shares in Vocus closed yesterday at $3.54, up 2.61 percent, and above the current offer prices.

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