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Discussions around the potential deal had been ongoing since July
Australia’s TPG Telecom has ended talks with Vocus Group for the sale of its non-mobile fibre assets for AU$6.3 billion ($4.2 billion).
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 network 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).
It seems the two companies had been unable to negotiate, as the deal’s period of exclusivity had expired twice, the last time being in October, although talks had continued since then
“The proposed transaction involved considerable complexity and, ultimately, the parties have been unable to reach alignment on the operating model and commercial terms,” TPG said in a statement.
TPG said that it will continue with its strategic review of its wholesale residential fixed access business, noting that interest from investors remains strong.“Noting ongoing strong interest from potential strategic and financial investors in the company’s fixed infrastructure assets, TPG will continue to assess value-optimising alternatives and continues to work with Bank of America on our strategic review,” read the statement from TPG.
But regardless of ongoing interest, news of the deal’s collapse was poorly received by shareholders, with TPG shares falling by 10.5% following the announcement, their lowest level since July.
In May last year, TPG Telcom were the last of Australia’s three largest telcos (Telstra, Optus and TPG), to sell off their mobile tower assets. These assets were sold to OMERS for AU$950 million ($627 million), with the proceeds from the deal allowing TPG to reduce its debt pile to AU$3.9 billion ($2.4 billion).
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