TPG hangs up on $6.3b asset sale to Vocus

afr.com:

TPG Telecom shares plunged after it failed to reach an agreement with Vocus Group over a $6.3 billion transaction to offload its Vision Network.

The TPG share price fell more than 6.5 per cent to $5.09 in early trading on Monday when it announced talks with suitor Vocus had crumbled.

TPG Telecom and Vocus have quit talks. Rob Homer

Discussions had dragged on for weeks despite the expiry of an exclusive period of due diligence on the potential sale of some of TPG’s fibre assets following the non-binding offer from Vocus.

“The proposed transaction involved considerable complexity and, ultimately, the parties have been unable to reach alignment on the operating model and commercial terms for TPG to have sufficient confidence that a successful transaction can be agreed and executed,” TPG said.

Vocus, which specialises in fibre networks and is owned by Macquarie Infrastructure and Aware Super, wanted to buy TPG’s broadband Vision Network as well as other assets in TPG’s enterprise, government and wholesale business.

TPG suggested other suitors interested in its fixed infrastructure assets might be in the wings.

The Inaki Berroeta-led TPG said it would look at other options to deliver value to shareholders after the collapse of talks with Vocus.

“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,” it said.

It is understood negotiations between TPG and Vocus were bogged down over which assets would be included, and how any sale would impact commercial arrangements with customers.

An asset sale would help TPG cut net debt from