Vocus Group is set to open its books to private equity firm, Kohlberg Kravis Roberts & Co (KKR), after granting the United States-based company non-exclusive due diligence rights.
KKR revealed plans to acquire Vocus Group in early June, with the US private equity firm tabling a $2.1 billion buyout proposal. The terms of the proposal would see KKR acquire 100 per cent of shares in the telco giant, at a price of $3.50 per share.
If such a deal should go through, KKR would own the Australian Securities Exchange (ASX)-listed telco and its portfolio of acquisitions, including M2 Group, Amcom and Nextgen Networks.
Vocus also acquired New Zealand telco network company, FX Networks, for NZ$115.8 million in 2014.
Now, Vocus has told shareholders that its board, together with its financial advisors, has carefully reviewed the indicative proposal by KKR in the context of the company’s current strategic plans.
Based on this review, the board has determined 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, the company said.
Vocus chairman, David Spence, has indicated that the company seems to be doing just fine without going down the path of an acquisition deal. At the same time, however, there is an obligation to shareholders to entertain such offers.
“The Vocus Board believes that the management of Vocus has established a strong strategic plan which will deliver value for shareholders both in the short and medium term,” Spence told shareholders.
“While we are confident that the management team can deliver on the strategic plan, we believe it is in the best interests of shareholders to grant KKR due diligence to explore whether a potential whole of company proposal is available that takes into account the benefits that the plan delivers.”
The indicative proposal is subject to a number of conditions, including due diligence to KKR's satisfaction, availability of financing, unanimous recommendation from the Vocus board, and entry into a definitive scheme implementation agreement between the parties, the telco said.
At the same time, the company reiterated that there is no certainty that granting due diligence based on the indicative proposal will result in an acceptable offer for Vocus, or whether there would be a recommendation by the Vocus board.