TPG Telecom Says Due Diligence Period with Vocus Expires for $4 bn Fiber Asset Bid

TPG Telecom, a prominent Australian telecommunications company, announced that the exclusive due diligence period granted to Vocus Group, a Macquarie-backed rival, for their bid on TPG’s non-mobile fiber assets has come to an end. The bid, valued at A$6.3 billion ($3.97 billion), was initially made in August.
TPG Telecom customersVocus Group’s proposal aims to acquire TPG’s Enterprise, Government, and Wholesale assets, along with associated fixed infrastructure assets, including the Vision Network. However, discussions regarding the commercial terms of the deal are ongoing, and TPG emphasized that the consideration is subject to change, citing the complexity of the transaction.

“TPG security holders should be aware that the nature of the transaction involves considerable complexity which needs time to work through, and there remains no certainty an agreed transaction will eventuate,” TPG stated in a news statement.

The bid encompasses TPG’s non-mobile fiber assets, specifically certain Enterprise, Government, and Wholesale (EGW) assets, and associated fixed infrastructure assets, including the wholesale broadband business known as Vision Network. The EGW segment contributed approximately 20.6 percent to the company’s total revenue for the first half of 2023.

A successful completion of the deal would result in the formation of a combined entity with an enterprise valuation ranging between A$8 billion to A$9 billion, Reuters news report said.

This offer from Vocus Group aligns with the ongoing trend of increased dealmaking within Australia’s telecom sector, with companies actively exploring options to upgrade aging infrastructure and capitalize on the growth in 5G technology.

In a separate transaction, TPG was engaged in an asset swap deal with Telstra. However, the deal faced regulatory opposition due to concerns related to competition. TPG had earlier stated that it would not appeal the country’s competition tribunal’s decision to block the asset transfer deal between the two telecom giants.