The Vocus Group Ltd (ASX: VOC) share price has started the week strongly and is zooming higher on Monday morning.
At the time of writing, the telco’s shares are up 19% to $5.20.
Why is the Vocus share price zooming higher?
Investors have been fighting to get hold of Vocus’ shares on Monday after it responded to media speculation in relation to a takeover approach.
According to the release, the company confirms that it has received a confidential non-binding, indicative proposal from Macquarie Infrastructure and Real Assets (MIRA) and its managed funds.
MIRA is aiming to acquire 100% of the shares of Vocus via a scheme of arrangement at a price of $5.50 per share. This price target represents a 25.5% premium to the last close price of Vocus shares.
Though, the release warns that the proposal is subject to a number of conditions including satisfactory completion of due diligence by MIRA, the securing of debt financing, unanimous recommendation by the Vocus board, and entry into a mutually acceptable scheme implementation agreement.
Furthermore, any scheme implementation agreement would also be subject to a number of conditions. These include shareholder, court, and regulatory approvals.
Due diligence granted
The company has advised that after consideration by the board and its advisers, the Vocus board has concluded that it is in the best interests of Vocus shareholders to explore the potential for a transaction with MIRA.
In light of this, it has granted MIRA due diligence access to enable the suitor to potentially put forward a binding proposal.
However, given that there is no certainty that the proposal will result in a binding offer for Vocus, it has urged shareholders to not take any action in response to the proposal.
Management will update the market as appropriate in line with its continuous disclosure obligations.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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