TPG Telecom’s talks with Vocus over $6b asset sale to continue
TPG Telecom and suitor Vocus Group are expected to continue talks over the potential sale of some $6 billion in assets for weeks despite the expiry of an exclusive period of due diligence.
TPG’s shares got a strong boost in early August to trade around $5.60 afterit confirmed it was in exclusive talks with Vocus to sell some of its fibre assets.
TPG Telecom CEO Inaki Berroeta is still trying to strike a deal with Vocus over a $6bn asset sale. Louie Douvis
However, TPG’s share price has weakened as talks drag on, and its stock fell 2 per cent at midday on Wednesday to trade at $5.25 per share.
An exclusivity period for due diligencehas already been extended once, and a second period of exclusivity expired on Wednesday without a deal.
But TPG says talks between the two parties are continuing, stressing that putting together a transaction involves “considerable complexity”.
The Australian Financial Review understands that both TPG and Vocus are keen to try to get a deal done but did not want to enter a third period of exclusivity that could end up being extended yet again or rush negotiations to meet a deadline.
The two companies are still negotiating over which assets would be included in a potential sale and how any sale would impact commercial arrangements with customers.
“Discussions between the parties in relation to the commercial terms remain ongoing,” TPG Telecom said on Wednesday, adding the $6.3 billion provisional sale value could change.
A sale of assets to Vocus would enable TPG to reduce its net debt, which is running at $3.9 billion, up from $3.6 billion a year earlier. It is also cutting costs by simplifying its brands and axing some services, such as providing email services.
Analysts have not been worried
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