- Internet service providers Vocus Group have fallen 28.5 per cent this morning after AGL Energy has ceased a due diligence assessment on the company, only six days in
- Proposed to pay $4.85 a share for the buyout, AGL CEO Brett Redman expressed that Vocus would not be able to uphold value for his shareholders, as previously believed
- This is the second mishap in a row as EQT Holdings also backed out of buying Vocus at the start of this month for $5.25 a share
Share prices in Vocus Group have plummeted 28.5 per cent this morning after AGL Energy has backed out of buying the company.
Ceasing a due diligence assessment on Vocus that was put forward only six days ago, AGL is no longer showing interest in buying out the internet service providers.
AGL Energy CEO Brett Redman said in an ASX release today the company is no longer confident Vocus can uphold value for his shareholders.
“The approach to Vocus reflected our [previous] view that the Vocus asset base has attributes that could support the execution of this strategy and benefit our customers,” Brett said.
Initially, AGL showed interest in buying out Vocus for $4.85 a share, a significant premium to affected VOC prices this morning sitting at $3.05 a piece.
Redman asserted that other opportunities for the company are on the horizon, filling the hole that was the possible Vocus deal.
“We believe there will be material opportunities for AGL as energy and data value streams continue to converge and the traditional energy sector accelerates its transformation,” he said.
This is a groundhog day moment for Vocus as EQT Holdings also pulled out of buying the company early this month. A deal put forward in May had EQT looking to buy out Vocus for $5.25 a share.
“AGL is exploring investment opportunities across three focus areas: optimising our existing portfolio for performance and value, evolving and expanding our core energy markets offerings, and creating new opportunities with connected customers,” Brett said on the company’s checklist that Vocus failed to meet.
Vocus CEO Kevin Russell said this morning on the AGL mishap that the company can still provide great business to shareholders.
“As we have repeatedly said, this is [an ongoing] three year turnaround,” he said.
“There is a growing demand for our strategically valuable network assets and we have a substantial opportunity for Vocus Networks to gain market share. This is the core of our business. The Vocus management team will now be able to focus all of their attention on realising the opportunity that we have ahead of us,” he said.
Share prices in AGL saw a 2.71 per cent boost after this morning’s announcement, trading shares for $20.10 each.