TPG shares lower on $5.25b Vocus deal
Make us a preferred source
Make us a preferred source on Google
More news: TPG Group shares fell on the ASX after the telecoms firm agreed to sell its government and enterprise fixed and fibre assets to Vocus Group for $5.25 billion.
TPG shares were down 1.5% to $5.02 by 1:10pm AEDT.
TPG to sell fibre and fixed network to Vocus for $5.25b
The news: Telecoms firm TPG Group has agreed to sell its fibre network infrastructure assets and its enterprise, government and wholesale (EGW) fixed business to Vocus Group.
The numbers: TPG will sell the assets for an enterprise value of $5.25 billion, including a potential $250 million contingent value payment. The deal includes TPG entering an access agreement under which Vocus will provide network services to TPG for a fee of $130 million per annum, with an initial 15-year term with two 10-year extensions at TPG’s election.
TPG said the transaction will deliver net cash proceeds in the range of $4.65 billion to $4.75 billion, which will be used to support future capital management and business investment initiatives.
The context: TPG, Australia’s third-biggest telecoms firm, had revived discussions with Vocus for the sale of the assets, after previously being unable to strike a $6.3 billion deal last year. The company has been looking to simplify its brand and product portfolio, and had first put these assets on the block in October 2022.
TPG said there will be no change to guidance for FY24 earnings of $1.95 billion to $2.03 billion excluding material one-offs, and cash capital expenditure excluding spectrum payments of approximately $1.02 billion. The company reiterated it is tracking towards the mid-point of the EBITDA guidance range.
The two parties are targeting completion of the deal in the second half of 2025, subject to all regulatory approvals.
The source: ASX announcement
