Vocus shares are getting hammered

Photo by Martin Hunter/Getty Images

Vocus shares came out of a trading halt at 11:00am AEST and plummeted by more than 16%.

It follows news that multiple private equity companies have dropped out of the race to buy the company.

Investing.com

In July this year, Affinity Equity Partners made a bid for the company at $3.50 a share, and Affinity was granted the opportunity to complete due diligence.

That followed a bid of the same amount by US private equity group KKR in June.

Prior to that, shares of the telecommunications provider slumped in May when it issued a downgrade to its revenue projections.

“Following the receipt of the initial, indicative proposals from the two parties, we believed it was in shareholders’ best interests to grant those parties the opportunity to conduct non-exclusive due diligence,” Vocus chairman David Spence said.

“The process with the Bidders has now concluded and the Board is looking forward to working with management to deliver improved returns for shareholders over the medium and long-term future.”

In a media release this morning, the company said that an important factor in its decision to conclude the sale process was its projections for future revenue growth.

Revenue is expected to increase to between $1.9 billion and $2 billion in the 2018 financial year.

“Notwithstanding the competitive market conditions, and the increased costs associated with the migration of customers to the NBN, the Board is confident that the Company can deliver a return to sustainable organic growth following a year of transition in FY17,” Vocus said.

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