AGL Energy has been granted access to conduct a four-week due diligence on Vocus roughly one week after the publicly-listed energy provider withdrew its offer after being "unable to agree to due diligence terms that were acceptable".
AGL's offer is approximately $260 million less that EQT's, which offered a deal valued at $5.25 per share in cash, worth $3.26 billion. The energy provider proposed $4.85 per share, totalling $3 billion.
The strategy for AGL, as the company stated, is to meet customers need as "energy and data value streams converge" and the traditional energy sector transforms.
If the acquisition goes ahead, AGL expects to drive 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 these assets as a result of a combination with AGL.
And lastly, AGL sees benefits of Vocus’ data centre business to its wholesale electricity generation portfolio, and the further platform for growth provided by this business.
"There is a clear market opportunity for Vocus, which is generating significant interest in our business and our assets," Vocus managing director and CEO Kevin Russell said.
"We are focused on executing our turnaround strategy and delivering the opportunity in front of us. However, we have been clear that the board will always act in the best interests of our shareholders to engage with credible parties that bring forward proposals that are worthy of further consideration."
AGL’s initial assessment of the transaction would be accretive to AGL’s earnings per share in the first 12 months post acquisition.
The indicative proposal is subject to a number of conditions, including completion of due diligence, unanimous recommendation from the Vocus board, and entry into a mutually acceptable scheme implementation agreement, which would also be subject to a number of further conditions, including shareholder, court and regulatory approvals.