VOC - Vocus Group

[peter2]

I agree that the chart looks appealing. A nice asc tri at the end of the 20 mth long base pattern augurs well. It's a company I've not traded and know very little about.

I'd like to know why price fell from 9.5 to 2.5 at the time the market was rising and that the problem has been rectified.

The current bumpy reporting season is opening up spaces in the portfolio every day.

 

[citac]

Some reasons for its downfall
-NBN wiping profit from the face of the earth.
-Sea cable, costing money while the business wasn't making up ground in other areas.
-Merger and acquisitions, nearly killed the business. To many to fast.
-Management and Boardroom issues.
-High Management turnover.
-Missed guidance 2 times from memory(please check that)
-TPG combined with IINET, seemed like it could/would dominate the market Vs Dodo and Iprimus.

That's all I can remember off the top of my head. But there's is more.

it is looking more positive, however the results will be the ultimate decider.

I got lucky and re bought then hit green and got out with +10%.

Telco is changing in so many ways, TPG and Voda, Vs Vocus and Optus, Vs Telstra trying to introduce 5G as to not use NBN and make greater profit margin.

 

[tinhat]

I sold out of VOC last year. The chart does look enticing but the telco sector is in a period of margin destruction brought about by the NBN. Telstra ended up with the lion's share of the new high frequency bandwidth that will power 5G and potentially compete directly with the NBN for use by the internet of things.

On the plus side, the story of VOC is one of internal transformation under the stewardship of Bob Mansfield. They are carrying a lot of good will on their balance sheet for a bunch of brands that are not that impressive IMHO.

 

[citac]

I sold out of VOC last year. The chart does look enticing but the telco sector is in a period of margin destruction brought about by the NBN. Telstra ended up with the lion's share of the new high frequency bandwidth that will power 5G and potentially compete directly with the NBN for use by the internet of things.

On the plus side, the story of VOC is one of internal transformation under the stewardship of Bob Mansfield. They are carrying a lot of good will on their balance sheet for a bunch of brands that are not that impressive IMHO.

Hi Tinhat,

I agree stay away, the 5G play by the telcos is drumming up investor support but once again, its to compete against the government.

 

[JTLP]

Any reasons why vocus has been on the march? Some solid increase recently.

 

[MARKETWINNER]

Only think I can say is: It is quietly going up. It had a strong start in January.

 

[galumay]

Not sure, its still a dog of a business IMO.

 

[Cam019]

Multiple entry signals here for VOC on both the daily and my own weekly system. Can't comment on the business side of things as it's not a consideration of mine when picking stocks, but I can appreciate others might be cautious about it. Still, a nice base breakout on the daily, however, waiting for a test of the support level would offer a better R:R opportunity.

 

[greggles]

Vocus Group has confirmed that it has received a confidential, non-binding, indicative proposal from EQT Infrastructure to acquire all of the shares in Vocus at a price of A$5.25 per share in cash, to be implemented by way of a scheme of arrangement.

After consideration by the VOC Board and the Company's advisers, the Board has decided to grant non-exclusive due diligence access to EQT to enable EQT to potentially put a formal binding proposal to Vocus. That process is likely to take a number of weeks.

Given that VOC's closing price on Friday was $3.89, an offer of $5.25 seems a pretty good result in the circumstances.

 

[JTLP]

Vocus Group has confirmed that it has received a confidential, non-binding, indicative proposal from EQT Infrastructure to acquire all of the shares in Vocus at a price of A$5.25 per share in cash, to be implemented by way of a scheme of arrangement.

After consideration by the VOC Board and the Company's advisers, the Board has decided to grant non-exclusive due diligence access to EQT to enable EQT to potentially put a formal binding proposal to Vocus. That process is likely to take a number of weeks.

Given that VOC's closing price on Friday was $3.89, an offer of $5.25 seems a pretty good result in the circumstances.

Hmm. Market isn’t convinced. Last potential T/O ended with buyers walking away (read - the books were no good). I’d be happy to get out around $5. Hopefully some other suckers step up to buy.

 

[JTLP]

Hmm. Market isn’t convinced. Last potential T/O ended with buyers walking away (read - the books were no good). I’d be happy to get out around $5. Hopefully some other suckers step up to buy.

And just like that, discussions terminated. Damn. Should have gone with the gut and sold.

$4 on the nose tomorrow I’d imagine.

 

[bigdog]

Motley reports
https://www.fool.com.au/2019/06/05/why-the-vocus-share-price-is-getting-slammed-today/

Why the Vocus share price is getting slammed today
Tom Richardson | June 5, 2019 |

The Vocus Group Ltd (ASX: VOC) share price plunged 18% to $3.75 this morning after the home broadband and enterprise-facing fibre-optic internet and data centre group had some bad news for shareholders.

Apparently Vocus’s Swedish private equity suitor EQT Infrastructure has withdrawn its $5.25 per share takeover bid after doing just over a week’s due diligence in the Vocus data room.

In fact, Vocus shareholders won’t like the look of the chart below:

Source: Google Finance

At $3.75 today, the Vocus share price is now 40% below the indicative $5.25 per share price EQT tabled this month. For investors, the big unanswered question is why has EQT become the third private equity group in a couple of years to walk away from a Vocus takeover offer after doing due diligence on the business.

In fairness to Vocus, there could be any number of reasons why the private equity groups walked away—including that the bids were quite speculative in the first place in wanting to have a closer look at the business, without a genuine commitment to proceeding with the bids.

Vocus also has a net debt load of $1.1 billion, and NBN-facing consumer broadband and business internet businesses as a result of its M2 Group merger that are lower quality compared to its dark fibre assets. As such, it’s likely that one issue weighing heavily on the minds of any potential private equity buyer is how much they could sell M2 or float the assets for in a bid to reduce the debt and restructure the business.

 

[JTLP]

I was way off. Finished below the pre-offer price. Buyers walking away from due diligence 3 times in a row mustn’t be a good look.

Wonder why they didn’t let AGL take a look?

 

[JTLP]

I was way off. Finished below the pre-offer price. Buyers walking away from due diligence 3 times in a row mustn’t be a good look.

Wonder why they didn’t let AGL take a look?

And just like that, AGL are back with a bid for $4.85. 4 weeks exclusive due diligence granted by Vocus. I can’t see the synergies but would be happy to have this taken off my hands at this price.

 

[So_Cynical]

I can’t see the synergies.

Something about smart grid and data...

 

[Smurf1976]

Something about smart grid and data...

The electricity retailers (retailers as distinct from generators or networks) are now responsible for new metering installations.

Existing property with existing meter = owned by the distributor (company that owns the poles and wires). Replacement metering installation at an existing property or a new building = metering is the responsibility of the retailer (eg AGL, Origin, etc).

Depending on what they want to do with the smart grid stuff, owning a telco may or may not have advantages there but there's a lot of "if" aspects to it in my opinion.

It's not the first such thing however on either side:

Telstra has had an electricity retail licence for years and it was always expected by many in the power industry that they'd become a major player but they've never pursued it.

Likewise there have been past communication offerings by electricity companies, including those who built their own FTTH network prior to the NBN idea.

It's a somewhat "loose" sort of synergy though but then there's the regulatory aspect. If AGL wants to grow its business then given their already large position and the politically contentious nature of the energy industry it's rather hard for them to grow in that space so they'd be looking at what else they could do. To the extent that they've got experience relevant to other things it's in finance, utility type services (eg telco) and mining. Of that lot, buying a telco is probably the easiest step.

 

[Smurf1976]

Adding that I left out data centers.

They're big energy users so another synergy for an energy company.

 

[Zaxon]

The electricity retailers (retailers as distinct from generators or networks) are now responsible for new metering installations.

Is that the case in all states? If so, some 2-bit electricity retailer startup, and there are a number of these since they're really just a billing service, will suddenly have to worry about meter infrastructure.

 

[Knobby22]

Is that the case in all states? If so, some 2-bit electricity retailer startup, and there are a number of these since they're really just a billing service, will suddenly have to worry about meter infrastructure.

There is a separate entity for metering installation.

 

[Zaxon]

It would seem that Smurf is correct. I guess smaller retailers will just hire a 3rd party company, perhaps like Service Stream Ltd.