Australian energy company offers $2bn for Vocus after EQT drops bid

11 June 2019 | Alan Burkitt-Gray

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An energy company has stepped in with a bid for Australian telco and subsea operator Vocus, just days after a Scandinavian bid collapsed.

AGL is offering $A3 billion (US $2.1 billion) for Vocus, which runs a 12,000km fibre network in Australia connecting 5,000 on-net buildings. Vocus also put its Australia-Singapore cable into service in late 2018, and it has 23 data centres in Australia, New Zealand and the Philippines.

AGL – the initials once stood for Australian Gas Light – is bidding 7.6% less than EQT of Sweden talked about last month in a non-binding, indicative proposal.

EQT – which is also a partner of Marc Ganzi’s Digital Colony in a $14.3 billion for Zayo – ended discussions after just a few days.

The Australian Financial Review reported last week that EQT did not say why it had changed its mind, but the paper said Vocus’s CEO, Kevin Russell, believed “the size of the turnaround task in the end proved too great a risk, outweighing the value of Vocus’s core fibre infrastructure assets”.

Now AGL has made a non-binding bid and is now conducting due diligence on the telecoms company. AGL told the Australian Stock Exchange: “AGL’s interest in Vocus is consistent with AGL’s strategy to meet the needs of increasingly connected customers as energy and data value streams converge and the traditional energy sector transforms.”

The company added: “The platform provided by Vocus’s offering to enterprise, wholesale and government customers to reinvigorate AGL’s value proposition to large volume customers through the provision of integrated data and energy services.”