Macquarie has entered an agreement to buy ASX-listed Vocus Group – owner of Orcon and Slingshot on this side of the Tasman – in a A$3.5 billion ($3.7b) deal, subject to investor and regulatory approval.<\/p>\n

The ASX-listed investment banking and infrastructure investment firm teamed with Aware Super – Australia’s second-largest retirement fund – on its $5.50 per share offer.<\/p>\n

In recommending shareholders accept the deal, Vocus chairman Bob Mansfield said in a statement to the ASX that the board had considered it against alternatives, including pressing ahead with the plan to list Vocus’ NZ business, then use the estimated $722 million proceeds to pay down debt.<\/p>\n

Speaking to the Herald, Vocus NZ CEO Mark Callander added: “The NZ business is very well positioned for growth and that won’t change. Unfortunately, the timing just did not allow for the IPO to be pursued at this time.”<\/p>\n

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  Callander added, “The goal has always been to improve the NZ business access to capital and now we have a couple of options on the table.The [Macqaurie\/Aware Super] offer recognises the strength of the Vocus Group on both sides of the Tasman and the progress made in the last couple of years.”<\/p>\n

  “Feedback from shareholders in recent weeks on the indicative offer of $5.50 originally received from [Macquarie subsidiary] MIRA has been overwhelmingly positive and there is a broad recognition that this is a very fair value for Vocus shareholders,” Mansfield said. The board unanimously recommended the offer.<\/p>\n

  ASX-listed Macquarie has yet to make any comment on its plans for Vocus Group, if its bid is approved. But Australian media have already reported that plans for a Vocus NZ IPO were likely to be shelved by the owner. If it does revisit the idea of a Vocus NZ spin-off, it could be via a trade sale.<\/p>\n

  <\/p>\n

  Vocus’ NZ assets include retail internet service providers Orcon, Slingshot and Flip (bought from NZ’s CallPlus for $250m in 2016); Stuff Fibre (bought from Nine earlier this year in a deal referenced at $8m in a Vocus filing); the nationwide fibre network formerly owned by FX Networks (bought in 2014 for $116m), data centres formerly owned by Maxnet (bought in 2012 for $10m and since upgraded) and small power retailer Switch Utilities.<\/p>\n

  The company is our third-largest broadband provider and in line for a customer spike – having recently been named as Sky TV’s partner for its pending broadband service.<\/p>\n

  Goldman Sachs, Craigs and Jarden had been appointed managers for the possible NZX float.<\/p>\n

  But now it could be that, for a second time, a big telco float on the NZX will be headed-off by a trade sale. In 2019, Vodafone’s plan to list its NZ operation was nixed by a private offer from Infratil and Brookfield.<\/p>\n

  Vocus Group’s ASX-listed shares were recently trading at A$5.45. On February 9, Vocus confirmed in a filing that it had received a non-binding bid from Macquarie Infrastructure and Real Assets Management (MIRA) of $5.50 a share – valuing Vocus at A$3.4b or a 25 per cent premium over its then stock price of A$4.38. MIRA is a unit of the ASX-listed Macquarie Group.<\/p>\n

  But that’s all speculation. As things stand, MIRA (a division of ASX-listed Macquarie Group) has yet to look at Vocus’ books, and the statement says there’s no guarantee a binding bid will follow (since 2017, three other non-binding bids, all from private equity companies – EQT, KKR and Affinity – fell over during due diligence).<\/p>\n

  <\/p>\n

  A busy few months has seen Vocus NZ buy Stuff Fibre, relaunch its budget-priced Flip brand, become the only major player to support Chorus’ Hyperfibre product, expand its partnership with Google, and reveal that it will be the partner for Sky TV’s soon-to-launch Sky Broadband service.<\/p>\n

  The Stuff Fibre acquisition bumped Vocus’ NZ subscriber base up 10 per cent to around 226,000 (putting Vocus well ahead of 2degrees and Trustpower in fixed-line broadband, if still some distance being Vodafone NZ on around 420,000 and Spark on around 700,000).<\/p>\n

  For its 2020 financial year, Vocus Group reported that revenue for its New Zealand operation rose 6 per cent to NZ$398.8m for the year to June 30, while ebitda rose 4 per cent to NZ$65.4m.<\/p>\n

  It was the NZ operation’s fifth straight year of operating earnings growth, helping to explain the apparent expectation of its IPO at a A$700m market cap – a substantially higher valuation than the reported A$500m price tag when Vocus tried to sell its NZ business in 2018 (it was ultimately withdrawn from sale).<\/p>\n

  Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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