Amcom shares up on merger proposal

27/10/2014 - 08:56

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Information technology provider Amcom Telecommunications' share price has risen sharply after telco group Vocus Communications said it had acquired a 10 per cent stake and proposed a merger of the two companies.

Amcom shares up on merger proposal

Amcom Telecommunications is considering a merger with Vocus Communications after the latter acquired a significant stake in Amcom and put a proposal to join forces on the table.

Sydney-based Vocus acquired a 10 per cent interest in Amcom last week and presented a proposal for the “combination of businesses”.

Under the proposal, Amcom shareholders would receive scrip in Vocus for their shares in Amcom.

Amcom shares rose sharply in response to the news this morning, with shares up more than 11 per cent to $2.07 each at 9:20am WST.

Vocus shares were up 1.5 per cent.

Combining the two businesses would create a company worth more than $1 billion.

The offer comes two months after Vocus forked out $11.7 million for ASG Group’s Bentley data centre.

Vocus chief executive James Spenceley said the offer should be attractive for Amcom shareholders.

"The assets and operations of Vocus and Amcom are highly complementary and the potential combination offers an enhanced growth platform, while creating a truly national player to capitalise on the evolving opportunities in the telecommunications sector," Mr Spenceley said in a statement.

But Amcom said it was seeking more details on the confidential, non-binding proposal, and was taking advice from financial advisory firm Lazard and law firm Clayton Utz.

"There is no certainty that these discussions will result in a transaction," the company's chief financial officer David A Hinton said.

Vocus owns optical fibre cables and data centres in Australia and New Zealand.

Amcom also own opitcal fibre networks and data centres, which it uses to provide IT and telecommunications products and services to leading companies, governments and other telco providers.

 

 

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