Australian fibre operator Vocus is reportedly participating in high-level negotiations over an AUD 6.3 billion ($4.2 billion) acquisition bid comprising various key assets of TPG Telecom. This investment bundle includes TPG’s enterprise, government, and wholesale commodities as well as Vision Network, its wholesale infrastructure arm.
This ongoing negotiation was confirmed by TPG after a related report was published by the Australian Financial Review. Although the offer does stand, TPG regards it as “indicative, highly conditional, [and] non-binding.” With that, Vocus has been granted exclusive time for due diligence, ending September 6, for a potential deal. As noted in their announcement, “Discussions between the parties remain incomplete and transaction terms are subject to ongoing negotiation.”
In an effort to mobilize its fixed assets, TPG recently sold off and rented back its remaining mobile towers. The following actions were taken last year May. Then, in September, it completed the reorganization of its extensive broadband networks under Vision Network, a functionally separate but wholly-owned wholesale brand.
Vision Network, serving approximately 410,000 premises across major metropolitan areas, is composed of various subnets such as FTTP, FTTB, FTTN, and HFC networks. TPG then sought the help of the Bank of America to review its strategies for Vision Network, promoting a price tag of around AUD 1 billion for a 70-80% controlling interest. Companies such as Uniti Group and investment firm PEP were attracted to the promising deal, yet none have been able to broker a firm agreement.
Nevertheless, it seems the grander offer from Vocus is for more than just the Vision Network. It plans to acquire a part of TPG’s enterprise, government, and wholesale businesses. This strategic move will solidify and broaden its market presence in these sectors. The acquisition will ease the net debt for TPG, enabling them to concentrate their spending on services.
Despite various advancements, the finalization of this deal remains uncertain, considering the number of potential buyers who have come and gone. Given the ongoing negotiations and the backdrop of potential outcomes, one thing remains clear: Australia’s telecom industry is caught up in a dynamic period defined by a fierce competition over market presence.
