A new Australian telecommunications player is in the making with Vocus Communications eyeing off Amcom Telecommunications.
Shares in Amcom, a residential broadband service provider, surged more than 12% today after Vocus revealed it bought 10% of the Perth-based company after the market closed on Friday.
Together the two companies have a market capitalisation of almost $1 billion.
Vocus is trying to convince Amcom that the two companies become one and is offering its own shares as payment.
“The assets and operations of Vocus and Amcom are highly complementary and the potential combination offers an enhanced growth platform, while creating a truly national player to capitalise on the evolving opportunities in the telecommunications sector,”says Vocus CEO James Spenceley.
“The proposed script consideration represents an attractive opportunity for Amcom shareholders to share in the ongoing growth of the high quality businesses and the favourable industry positioning of the combined entity.”
Full details of the offer haven’t been revealed.
Amcom posted a net profit of $23.2 million in the year to the end of June on the back of revenue of $170.4 million.
Vocus posted an underlying net profit of $13.6 million on revenue of $92.3 million.
Vocus has 600 kms of metro fibre in Australia, connecting more than 1,000 buildings in capital cities and more than 4,200 km of intercity fibre in New Zealand.
Amcom shares were up 12.37% to $2.09. Vocus was trading up 1.88% to $5.41.