Vocus Swoops in With A$6.3 Billion Bid for TPG Assets
By Nick Wood, Telecoms.com
August 1, 2023
Australian fibre operator Vocus is willing to splash some serious cash to expand its footprint.
On Tuesday it emerged that it is negotiating a A$6.3 billion ($4.2 billion) offer for a chunk of TPG Telecom’s enterprise, government, and wholesale assets, including Vision Network – its wholesale infrastructure arm.
The bid was confirmed by TPG in a stock exchange filing following a report by the Australian Financial Review. TPG describes the offer as “indicative, highly conditional, [and] non-binding.”
Vocus has been granted a period of exclusive due diligence, which will run until 6 September.
“Discussions between the parties remain incomplete and transaction terms are subject to ongoing negotiation. Securityholders should be aware that the Board of TPG has not made any decision to accept any offer, and there is no certainty an agreed transaction will eventuate,” TPG said.
Having sold off and leased back its remaining mobile towers last May, TPG then turned its attention to its fixed assets.
In September in 2022, it completed the reorganisation of its sprawling broadband networks under a functionally separate but wholly-owned wholesale brand, Vision Network. Comprised of FTTP, fibre-to-the-building (FTTB), fibre-to-the-node (FTTN), and hybrid fibre coaxial (HFC) networks, Vision Network reaches approximately 410,000 premises, located predominantly in metropolitan areas.
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Rather than settle for just the infrastructure though, Vocus and its parents want a chunk of TPG’s enterprise, government and other wholesale operations too, hence the larger offer. Vocus is a direct competitor to TPG in these markets, operating a 25,000 km fibre network that includes a submarine cable system connecting Australia to Singapore.
Should an agreement be reached, it will significantly expand Vocus’ presence in these aforementioned markets. For TPG, it will help to clear its net debt – which stood at A$3.7 billion at the end of last year – and allow it focus its spending on services.
