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Australia's Vocus opens books for KKR to conduct due diligence
Australia's Vocus opens books for KKR to conduct due diligence
Reuters | Jul 04, 2017 08:33PM ET
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Australia's Vocus opens books for KKR to conduct due diligence
(Reuters) - Vocus Group Ltd (AX:VOC) said on Wednesday it would allow KKR & Co LP (N:KKR) to conduct due diligence on a non-exclusive basis, a month after the private equity firm made a $1.66 billion takeover offer for the Australian internet company.
Vocus had received an indicative, non-binding proposal from KKR for A$3.50 per share in cash on June 7. The stock has taken a hit since May after the firm slashed annual profit guidance.
Vocus shares have lost about 4.9 percent since the launch of KKR's offer. They closed on Tuesday at A$3.31 a share.
"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," Vocus Chairman David Spence said in a statement.
Vocus said in Wednesday's statement that its shareholders do not need to take any action at this time.
"The Vocus Board notes that there is no certainty that granting due diligence based on the Indicative Proposal will result in an acceptable offer for Vocus, nor what the terms of any such offer would be, or whether there would be a recommendation by the Vocus Board," the company said.
While Telstra Corp Ltd (AX:TLS) dominates Australia's telecommunications and internet markets, smaller rivals such as Vocus are jostling for exposure to a government-led A$40 billion ($30.44 billion) broadband network that is being built around the country.
($1 = 1.3139 Australian dollars)