The Vocus Group Ltd (ASX: VOC) share price could be on the move on Monday amid speculation that the telco company could be the latest ASX share to be targeted by private equity firms.
This follows the recent completion of the Healthscope Ltd (ASX: HSO) acquisition by Brookfield Business Partners for $4.4 billion and rumours that Lendlease Group (ASX: LLC) could be a target of a large Japanese private equity group.
What has happened?
According to the AFR, Vocus is believed to have received a number of takeover approaches and its board is now considering the launch of a formal sale process.
Investment bank UBS is rumoured to be advising Vocus and could run an auction in the near future.
This isn’t the first time that private equity has had its eyes on the company. In 2017 the company received offers from Kohlberg Kravis Roberts (KKR) and Affinity Equity Partners, valuing it at $3.50 per share.
However, the two parties ultimately pulled the plug on a deal after completing due diligence.
Vocus explained at the time: “Throughout the due diligence process, the bidders indicated support for management’s strategic plans and transformation program. However, the bidders have now advised that they are unable to support a transaction on terms acceptable to the board. Accordingly, all discussions have now ceased.”
Interestingly, Affinity Equity Partners is believed to be amongst the interested parties this time around along with Brookfield Business Partners.
But Affinity Equity Partners will have to pay a higher price this time around if it wants to acquire the company, as the Vocus share price closed the week at $3.89 on Friday. This is over 11% higher than its previous takeover approach.
Though, it is worth remembering that at this point this is just speculation and neither the rumoured bidders nor Vocus have confirmed things.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019