In response to the recent takeover bid, directors of Vocus Group Ltd (ASX: VOC) announced this morning that:
"…subject to negotiation of an appropriate confidentiality agreement, it is in the best interests of shareholders to grant KKR the opportunity to conduct due diligence on a non-exclusive basis in order to establish whether an acceptable binding transaction could be agreed."
Investors will know that buyout company Kohlberg, Kravis, and Roberts ('KKR') have made a non-binding offer to acquire Vocus at a price of $3.50 per share, subject to certain conditions. Vocus' update this morning states that they will agree to let KKR look at their books, if an agreement can be struck to keep the information KKR will see confidential.
However, it looks as though Vocus management is not too keen on the price that KKR is currently offering:
I paraphrase, but Vocus has "established a strong strategic plan" and feels that it is best to "explore whether a potential whole of company proposal is available that takes into account the benefits that the plan delivers." (emphasis added)
Or in other words, you need to pay us more because your current offer does not take into account the potential for improved performance in the business, which were my thoughts exactly. If KKR offers to buy your company for $3.50 per share, you can be sure of one thing – it is because they think it is worth significantly more than $3.50 per share.
It is unknown at this stage if a binding bid will eventuate, or on what terms, or if such an offer will even be approved by the board. There is also still a lot of chatter in the media and market about the potential for a rival private equity group to lob a higher takeover bid. Management advised shareholders to take no action.
