The Vocus Group Ltd (ASX: VOC) share price has risen in reaction to the company's update about the ongoing takeover process for the business.
There is currently a non-binding, indicative proposal from Macquarie Group Ltd's (ASX: MQG) Infrastructure and Real Assets (MIRA) and its managed funds to acquire the entire Vocus business.
The offer price is $5.50 per share. That price represented a premium of around 25% compared to the previous closing price at the time. The current Vocus share price is still 10% lower than the offer price.
What's the latest update about the takeover?
Vocus said it had been advised by MIRA that it has entered into a co-operation agreement with Aware Super to progress its proposal through a consortium.
The proposal remains indicative and non-binding. It is still on the same terms as the previous offer. The offer remains subject to the same conditions that Vocus had previously announced a few weeks ago. Some of those conditions included satisfactory completion of due diligence, MIRA securing debt financing, unanimous recommendation by the Vocus board and entry into a mutually acceptable scheme implementation agreement.
Vocus said that the consortium's due diligence investigations are continuing. The Vocus board noted that there is no certainty that the proposal will result in a binding offer for Vocus. The company said it would update the market when there is something else material to tell the market.
Opinions on this deal
Credit Suisse has noted that MIRA has investments in telecommunications across many countries. It is also a large shareholder in Aussie mobile telecommunications infrastructure business Axicom. The broker thinks MIRA has a good understanding of the Australian telco sector and telecommunication assets.
Ord Minnett thinks that the takeover offer is credible because of its advantages relating to cost of capital and the ongoing growth plans. It thinks that another bid could emerge.
The Australian Financial Review reported that the deal is under scrutiny after prior bidders walked away after doing due diligence. The AFR went on to say:
Industry sources say Vocus is confident it can get this deal over the line, because its health is robust compared with 2019, when separate bids from AGL Energy Ltd (ASX: AGL) and private equity firm EQT died early during due diligence.
Analysts have said the main attraction for MIRA is Vocus' vast fibre infrastucture network, and there is speculation that any new owner would look to spin-off the company's retail business.
