TPG Telecom said that the proposed deal presented significant complexity, which led to an inability of the involved parties to align on the operating model and commercial terms and as a result the company lacks the necessary confidence that a successful agreement and execution of the transaction can be achieved
TPG Telecom and Vocus Group fail to agree on commercial terms of their proposed transaction. (Credit: Anne Verschraagen from Pixabay)
Australian telecom company TPG Telecom said that it has terminated discussions with Vocus Group regarding the proposed sale of specific non-mobile fibre assets for about A$6.3bn ($4bn) to the latter.
The decision to cease talks was made due to a failure to reach a consensus on the commercial terms of the proposed deal.
Vocus Group is a fibre and network solutions provider with operations across Australia and New Zealand. It is owned by a consortium made up of Macquarie Infrastructure and Real Assets (MIRA), and Aware Super.
TPG Telecom had intended to sell its enterprise, government, and wholesale assets, including Vision Network, as part of the proposed transaction.
According to the telecom company, the proposed transaction presented significant complexity, which led to an inability of the involved parties to align on the operating model and commercial terms.
TPG Telecom said that as a result it lacks the necessary confidence that a successful agreement and execution of the transaction can be achieved.
The company stated: “TPG remains committed to exploring options to deliver value for shareholders. 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.”
In October 2022, TPG Telecom initiated a strategic review of its wholesale residential fixed access business, resulting in the receipt of several non-binding expressions of interest.
At that time, the company said that its board is focused on realising value for its shareholders and facilitating Vision Network in harnessing its full potential as Australia’s largest non-National Broadband Network (NBN) residential wholesale access network.
Subsequently, in August 2023, TPG Telecom disclosed that it had received an “indicative, highly conditional, non-binding offer” from Vocus Group for the mentioned assets. This indicative offer was contingent upon various factors, including due diligence, debt financing, finalisation of transaction documentation, and approvals from the respective boards of both companies.
Vocus Group was granted a period of exclusive due diligence, which initially expired on 6 September 2023, and was subsequently extended before ultimately lapsing last month.