The Vocus Group Ltd (ASX: VOC) share price rollercoaster ride has continued on Tuesday with a big push higher.
At the time of writing the telco company's shares are up 12% to $4.30.
Why is the Vocus share price storming higher today?
Last week the Vocus share price crashed lower after EQT Infrastructure terminated its $5.25 cash per share takeover approach after completing an accelerated period of due diligence.
But it didn't take long for a new suitor to arrive. This time it is energy retailer AGL Energy Limited (ASX: AGL) that has come forward with a non-binding, indicative proposal to acquire the company at $4.85 per share.
Although this is 7.6% lower than EQT Infrastructure's offer and values Vocus at ~$3 billion, Vocus has granted exclusive access to conduct due diligence for a period of four weeks.
Why is AGL interested in Vocus?
The release explains that the energy retailer's interest in Vocus is consistent with its strategy to meet the needs of increasingly connected customers as energy and data value streams converge and the traditional energy sector transforms. It is also aligned with its capabilities in integrating and managing complex assets and customer portfolios.
In light of this, the company "believes acquiring Vocus may be an optimal way of executing this strategy, creating material shareholder value and driving customer loyalty while providing access to a market-leading integrated broadband fibre asset base and creating considerable additional options for long-term growth."
Furthermore, management expects customer loyalty and operating cost benefits from the integration of the two companies' customer platforms and development of a multi-product offering across energy and data.
It also sees the opportunity to accelerate untapped growth potential in Vocus' high quality broadband fibre infrastructure network and generate further incremental value from those assets as a result of a combination with AGL.
In addition to this, management believes that Vocus' exposure to enterprise, wholesale, and government customers could reinvigorate AGL's value proposition to large volume customers through the provision of integrated data and energy services.
However, it has warned that discussions are incomplete and there is no certainty they will lead to a binding agreement.
This announcement hasn't been enough to keep the AGL share price from sinking 5% lower this morning. Offsetting this positive news was an earlier announcement advising that its FY 2020's profits would be hit by upwards of $100 million due to an outage.
