Vocus To Turn Down $3bn Bid, Push Ahead On Singapore Cable
Australia’s troubled No 4 telco Vocus will reject the $3.3 billion bid for the company by the US-based Kohlberg Kravis Roberts, Vocus CEO Geoff Horth has revealed. The bid has been described as “opportunistic”, coming at a time when Vocus had been hit by internal problems and its share price was at a record low.
Horth, pictured, made the company’s attitude to the KKR bid known at a company “strategy day” for investors in Sydney this week.
He also revealed that some company assets, including its datacentres, could be up for sale, but said Vocus intends to push ahead with its Australia-Singapore submarine cable (ASC) project – one of several in the region.
He told Communications Day that Vocus expects to finalise a number of “cornerstone” contracts for the submarine link in 30 to 45 days. This comes despite the prospect of a rival cable project by Indigo, backed by a consortium that includes Telstra and Singtel.
Vocus CFO Mark Wratten told the Sydney meeting that that ASC funding was “a pretty big hot topic in the boardroom and the executive room … there’s a huge amount of capex associated with ASC in the first half of next year (of) $90-95 million.”
Despite the looming competition, ASC commercial director John Allerton said the planned ready-for-service date of mid-2018 would yield a “key first mover advantage” in realising the “pent-up contestable demand” on the route.
On a different matter, Horth said Vocus would be open to selling off its datacentre assets if the offer is right. “Datacentres are such a specialist asset class, now,” he said. “Telcos used to own DCs; [today] the reality is that with specialist operators like NextDC and Equinix, that’s an area where carrier-neutral facilities are the new norm.”