EQT Infrastructure offers $2.6b for Australia's Vocus

EQT is willing to pay A$5.25 per share for all outstanding shares. The stock jumped 21% following the announcement on May 27 to A$4.72, its highest mark since late 2016. It was trading at A$4.55 as of mid-morning May 28.

It follows the withdrawal of bids by KKR and Affinity Equity Partners in 2017 that each valued the company at about A$2.2 billion. Vocus shares fell as low as A$2.64 after it confirmed it had ended talks with the two GPs without specifying a reason for rejecting their proposals. The prior week, Vocus had disclosed a non-cash impairment of A$1.5 billion for the 2017 financial year.

The company, which operates a fiber network that connects all the capital cities and most regional cities across Australian and New Zealand, has granted EQT non-exclusive due diligence access. The submission of a formal binding proposal, subject to conditions including a unanimous recommendation from the Vocus board, is expected to take a number of weeks, according to a statement.

Vocus' network includes 30,000 kilometers of terrestrial cable supported by 4,700 kilometers of submarine cable connecting with Singapore, Indonesia and offshore oil and gas facilities. Revenue improved 2% during 2018 to A$1.9 billion, with the company citing an Australian expansion drive and stronger sales in its long-haul network. Profit came to A$61 million compared to a loss of A$1.5 billion the prior year, which was attributed in part to the acquisition of local telecom Nextgen Networks.

Data infrastructure in Asia Pacific, including fiber cable, is seen as a compelling trend for investors due to the continued growth in demand for greater computing capacity and internet access in remote areas and emerging markets. Data-focused assets are said to benefit from a more flexible and scalable development profile than traditional infrastructure. 

EQT's most recent infrastructure fund launched last year with a corpus of EUR9 billion ($10.1 billion). It will make primarily equity or equity-related investments of up to EUR600 million. Nearly 25% of the corpus is expected to be deployed in Asia Pacific.

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• Topics
• Australasia
• Infrastructure
• Buyouts
• Australia
• EQT Partners
• TMT