Vocus has decided to grant giant private equity group KKR access to its books so it can conduct due diligence for its $2.18 billion takeover offer for the Australian telco.
KKR has offered $3.50 cash per share in a conditional bid. Vocus shares last traded at $3.31.
Under the deal, KKR would also take on Vocus’s debt up to $1.1 billion.
“The Vocus board believes that the management of Vocus has established a strong strategic plan which will deliver,” says Vocus chairman David Spence.
“While we are confident that the management team can deliver on the strategic plan, 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.”
The telco’s board of directors has appointed Credit Suisse and Goldman Sachs as its financial advisors and Allens as legal adviser.
The company has been growing via a series of acquisitions, including M2 and Nextgen.
However, last month Vocus downgraded its revenue and profit forecasts.
Underlying EBITDA is now expected to be between $365 and $375 million compared to guidance of $430 to $450 million. And underlying net profit after tax is now expected to be in the range of $160 million to $165 million compared to guidance of $205 million to $215 million.
In February, Vocus posted a net profit after tax of $47.2 million from revenue of $888.2 million.