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Shares in internet service provider Vocus (ASX: VOC) fell almost 15 per cent at market opening this morning after Swedish company EQT decided to scrap its $3.3 billion takeover offer for the company.
On 27 May EQT made a non-binding bid at $5.25 for the Melbourne-based group which owns the iPrimus and Dodo brands, representing a 35 per cent premium on the previous day's closing price.
Vocus shares surged after that announcement but at their height they were still 11 per cent short of EQT's offer price, demonstrating scepticism amongst investors about what the Swedes might find.
After an accelerated period of due diligence, Vocus announced yesterday that EQT decided not to proceed with the transaction, and dicussions around the indicative proposal have ceased.
"As we said in our Interim Results on 27 February, we are in the early stages of a business turnaround," said Vocus CEO Kevin Russell (pictured).
"We have great confidence that our strategy will deliver significant value to our shareholders in the medium to long term.
"There is growing demand for our strategically valuable network assets and we have a substantial opportunity to gain market share in Vocus Networks, which is the core of our business."
Russell thanked EQT for its interest and noted Vocus, the board and the management team would now be able to focus all their attention on realising the opportunity ahead.
A strategy update for investors is expected in the last week of June, and Vocus has reiterated its FY19 guidance of an EBITDA between $350-370 million.
EQT's withdrawal follows a similar decision made by suitor AGL (ASX: AGL), which had made a confidential, non-binding indicative offer for Vocus but on Friday announced the parties were "unable to agree due diligence terms that were acceptable to AGL".
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