Australia's AGL backs out of Vocus offer for second time

Credit: REUTERS/David Gray

Australia's AGL Energy Ltd said on Monday it would stop due diligence on Vocus Group just days after it offered A$3.02 billion ($2.08 billion) for the telecoms firm, and just weeks after withdrawing a previous approach.

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June 17 (Reuters) - Australia's AGL Energy Ltd AGL.AX said on Monday it would stop due diligence on Vocus Group VOC.AX just days after it offered A$3.02 billion ($2.08 billion) for the telecoms firm, and just weeks after withdrawing a previous approach.

Analysts have been skeptical about the benefits AGL would derive from a takeover of Vocus, which is in the midst of turning around its business.

Three other potential suitors have withdrawn offers for the telecoms firm over the past two years.

AGL initially said its second proposal, which was pitched below a A$3.3 billion bid withdrawn by Swedish private equity firm EQT Infrastructure, would be accretive to earnings.

"We are no longer confident that an acquisition of Vocus at the proposed terms would represent sufficient certainty of creating value for AGL shareholders," AGL's Managing Director & CEO Brett Redman said in a statement.

Earlier in June, AGL warned fiscal its 2020 earnings will be up to A$100 million lower because its Loy Yang A power station in Victoria would be offline until December due to damage caused by an electrical short.

($1 = 1.4545 Australian dollars)

(Reporting by Nikhil Kurian Nainan in Bengaluru; editing by Richard Pullin)

((NikhilKurian.Nainan@thomsonreuters.com; +91 806 749 1637; Reuters Messaging: nikhilkurian.nainan.thomsonreuters.com@reuters.net; Twitter: @NikhilKurianN))

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