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Talks between the two firms are set continue despite passing a recent deadline, with TPG noting the transaction involves “considerable complexity”
Australia’s TPG Telecom has announced that the due diligence period given to Vocus Group to present a formal bid for a portion of it fibre assets has expired.
In August, Vocus Group made a non-binding offer of AU$6.3 billion ($4.2 billion) to buy rival TPG Telecom’s enterprise, government, and wholesale assets, which included their wholesale broadband business, Vision Network.
This unit made up 18% of TPG Telecoms’ total fiscal revenue last year, at AU$5.52 billion ($3.65 billion).
The period of exclusivity had already been extended once to the 6th September by TPG, which has now expired for a second time.
But despite not reaching a formal agreement, it seems that both firms are still keen to negotiate.
“The consideration of AU$6.3 billion and the highly provisional indicative EBITDA perimeter of approximatelyAU $550 million are subject to change. TPG securityholders 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,” said TPG in a statement.
If successful, the deal would create a combined entity with an enterprise valuation of between AU$8 billion and AU$9 billion ($5.06 billion and $5.69 billion)
Last year, TPG Telecom was the last of Australia’s three largest telcos to sell off their mobile tower infrastructure. The firm sold its mobile towers and rooftop infrastructure to OMERS in a AU$950 million ($627 million) deal, with TPG using the funds to reduce a debt pile currently standing at $3.9 billion.
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