AGL AGL Energy Limited

   By Robb M. Stewart 
 

MELBOURNE, Australia--AGL Energy Ltd. (AGL.AU) confirmed an interest in buying into Australia's telecommunications sector with a bid for Vocus Group Ltd. (VOC.AU), but said Friday it dropped an offer after being unable to agree terms to gain access to Vocus's books.

Early this week, Vocus agreed to allow Swedish asset manager EQT to conduct due diligence in the hope of firming up a tentative takeover offer worth about 3.27 billion Australian dollars (US$2.26 billion).

In response to a report in the Australian Financial Review about its potential interest in Vocus, AGL said it recently had contacted Vocus with a tentative bid and was seeking access to due diligence material so it could determine whether to make a binding offer. The bid has now been withdrawn, the utility said. The terms of its bid weren't disclosed.

Suitors have been circling Vocus for several years. In late 2017, competing private equity firms KKR & Co. and Affinity Equity Partners ended talks with Vocus after each found it couldn't support a takeover offer on terms that were acceptable to the telecom company's board.

On Monday, Vocus said EQT Infrastructure had made a non-binding offer of A$5.25 a share in cash, a 35% premium to the closing price the previous session. The bid is subject to a number of conditions, including securing committed financing and the unanimous approval of Vocus's board, plus the usual shareholder and regulatory approvals.

Vocus owns telecom networks in capital and regional cities in Australia and New Zealand, with a portfolio of brands focused on a range of corporate, small business, government and residential customers. Over the last couple of years, the company has shifted from a concentration on fiber-networks on Australia's east coast to a broader range of telecom operations across the two countries, other products including television and insurance services, and retailing electricity and natural gas.

AGL, which operates the largest electricity-generation portfolio in Australia, in February said it was assessing growth opportunities to meet the needs of customers as energy and data streams continue to converge. On Friday, it said that in recent months it had been assessing potential investments to support this strategy, and that it would continue to assess opportunities.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

May 30, 2019 19:10 ET (23:10 GMT)

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