The Vocus Group Ltd (ASX: VOC) share price dived 16% to $2.70 as the company announced it had concluded the sale process with private equity firms KKR and Affinity, who both declined to make a binding offer to acquire the company.
Both bidders had lobbed non-binding offers to acquire Vocus at up to $3.50 per share, but today the offers were withdrawn as "the Bidders have now advised that they are unable to support a transaction on terms acceptable to the Board. Accordingly all discussions have now ceased."
Media outlets had suggested that some of Vocus' expansion plans were a bone of contention with would-be bidders, with the Australia Singapore Cable (ASC) not a favourite. Alternatively, it is possible that bidders simply did not want to pay too much for a company burdened with debt, as Vocus is.
Some investors are probably also wondering if there could be further cockroaches in the kitchen, with KKR and Affinity both getting a good look at Vocus' books in the lead-up to the annual results release on Wednesday, 23 August.
Vocus management has reiterated their forecasts for revenue between $1.9 billion and $2 billion in 2018, as well as earnings before interest, tax, depreciation and amortisation (EBITDA) of between $370 million and $390 million. We'll have full coverage of the results when they come out on Wednesday.
