Australian fiber network operator Vocus Communications has revealed it has secured two competing non-binding takeover bids valuing the company at A$2.2 billion ($1.69 billion).
Affinity Equity Partners has submitted a preliminary offer to acquire 100% of Vocus for A$3.50 in cash per share, subject to due diligence and other conditions. Vocus announced.
The bid comes days after fellow private equity company KKR submitted a preliminary offer at the same A$3.50 per share price.
Both private equity companies have been granted the chance to conduct due diligence on the potential takeover. The prospect of a bidding war has pushed Vocus shares on the Australian stock exchange up to A$3.595 as of around midday local time on Thursday.
The price tag represents around a 16% premium on Vocus' projected earnings for the current financial year, but the offer price may increase as negotiations progress.
Vocus operates a range of telecoms brands serving enterprises, small businesses, government and residential customers, including Commander, iPrimus and Dodo.
The value of the company has shrunk significantly lately due to concerns its profitability will be substantially reduced as customers migrate to the state-led national broadband network (NBN). A year ago the company has a valuation of around $5.5 billion.