KKR Gets To Check Vocus Books As $795mil. Bid Looms
Australia’s No 4 telco and fibre network NBN operator Vocus, is edging closer to a possible takeover, inviting global buyout operator Kohlberg Kravis Roberts into its data room to evaluate a possible bid.
The deal is on a non-exclusive basis and the independent board committee, led by Vocus chairman David Spence, pictured, is hoping that granting KKR access to the books could prompt other suitors to show their hand, according to an Australian report.
Vocus had announced receiving the takeover proposal a month ago, with KKR proposing to acquire 100 percent of its 227 million shares on issue at $3.50 each, for a total of around $795 million. But it first wanted to check the books.
The shares closed at $3.38 yesterday, up 70c, but below recent highs of around $3.70-$3.90. Around two million shares changed hands.
Spence yesterday was stressing that the latest move does not necessarily mean that the company is locked into a KKR takeover.
“The Vocus board believes that the management of Vocus has established a strong strategic plan which will deliver value for shareholders, both in the short and medium term,” he said in a media statement.
“While we are confident that the management team can deliver on the strategic plan, we believe it is in the best interests of shareholders to grant KKR due diligence to explore whether a potential whole-of-company proposal is available that takes into account the benefits that the plan delivers.”
However, some analysts have expressed concerns over the outlook for Vocus.
“The opportunities are significant, but none look like easy wins to us, with Vocus needing to fix the cash flow, churn and provisioning issues, automate processes, and boost cross-sell rates,” Citi analyst David Kaynes said in a recent note to its clients.