Australian energy company AGL withdrew its A$3 billion takeover offer for Vocus. That makes it the second potential buyer to walk away from the business in the past fortnight and the fourth in two years. In each case the deal floundered at the due diligence stage.
The move saw Vocus shares lose a third of their value. Meanwhile AGL shares climbed on the news.
AGL says; “We are no longer confident that an acquisition of Vocus at the proposed terms would represent sufficient certainty of creating value for AGL shareholders.”
Vocus chief executive Kevin Russell repeated his earlier comments following the failed A$3.3 billion offer from Swedish private equity firm EQT. He says the company is in the midst of a three-year turnaround and it will now focus on growing market share of its network business.
He says; “We have great confidence that our strategy and ability to execute our business plan will deliver significant value to our shareholders in the medium to long-term”.
In 2017 private equity firms Kohlberg Kravis Roberts and Affinity Equity Partners both withdrew bids.
Reports in Australian media say that bidders walk away from Vocus because the plan to turn around the business is more complex than it appears from outside the company. Vocus is the result of a number of industry mergers, along the way it acquired other companies and has struggled to integrate the parts.
In Australia, Vocus’ consumer business is losing money.