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Vocus in ASX trading halt after NBR report it will buy FX Networks

UPDATE / July 1: Vocus shares remained in a halt as of early Tuesday afternoon Australian time.


June 30: Shares of Vocus Communications were halted from trading on the ASX after NBR ONLINE reported it is close to buying fibre optic cable network operator FX Networks for more than $100 million.

"The trading halt is requested in response to media speculation this morning and pending an announcement by the company of a possible acquisition," Vocus said in a statement.

Vocus shares have soared 128 percent in  the past 12 months, and last traded at A$4.76 on the ASX, valuing the company at about A$442 million. The S&P/ASX 200 Index climbed 15 percent in the same period.

The company may have to raise capital to fund an acquisition of that size, as cash stood at A$7.7 million as at Dec. 31 and it raised A$48.7 million in March via a placement of shares. Vocus describes itself as the leading independent provider of wholesale and telecommunications services in Australia and New Zealand, providing internet, fibre and ethernet, and data centre services.

FX Networks owns and operates a national inter-city fibre optic network in New Zealand, has annual revenue of more than $50 million  and more than 3,000 clients, according to its website. The company has laid 4,200 kilometres of fibre and has 29 Tb of national capacity, it says.

At the time of the placement in March, Vocus said it was considering "potential acquisitions that would expand or complement its existing product set and network reach."

FX Network shares are allocated between 108 shareholdings, the largest of which is Isle of Man-based Peregrine, which NBR says is owned by FX chairman Colin Hill. A further 18 percent is owned by Penrith Holdings, which in turn is owned by family trusts associated with Maureen and Paul Benjamin and Taupo-based investor Gray Thompson.

Hill confirmed the company has been in sale talks, according to NBR.

Earlier this month, Vocus announced the acquisition of a 10 percent interest in the Sea-Me-We 3 undersea cable linking Perth, Australia, with Singapore from Telecom New Zealand for US$2.3 million.

(BusinessDesk)