Telecommunications company Swoop Holdings (ASX: SWP) has submitted a non-binding proposal to acquire 100% of Vonex (ASX: VN8) in a competitive bid to derail an existing arrangement between Vonex and Maxo Telecommunications. Swoop’s offer has been met with strong resistance from Vonex, labelling the proposal as uncertain and urging shareholders to ignore it.
The proposal by Swoop outlines a combined cash and scrip offer of $0.04 per VN8 share. This represents a premium compared to MaxoTel’s offer of $0.0375 per share. Swoop also suggested that Vonex shareholders could benefit from synergies estimated to provide over $5 million in EBITDA annually, in addition to the potential for Vonex shareholders to gain exposure to a larger combined entity.
James Spenceley, Chair of Swoop, emphasised the potential value of the deal.
“This would be an excellent transaction for both Swoop and Vonex shareholders,” he said.
“Swoop is in a strong position to be able to both acquire the business, integrate and extract material synergies given the Swoop team has a more than decade long demonstrated ability to acquire and integrate business well.
“This acquisition combined with our recent large infrastructure contract wins, successful non-core asset disposals and demonstrated above market organic growth means this is an exciting opportunity for our existing shareholders as well as incoming Vonex shareholders.”
However, Vonex was quick to respond, dismissing the proposal as lacking in substance and certainty. In its media release, Vonex highlighted several concerns with Swoop’s offer, notably the fact that it was conditional on credit approval from Swoop’s lender and contingent on the execution of a binding Scheme Implementation Deed, which Vonex had yet to receive.
Vonex’s Board expressed scepticism over the potential value of Swoop’s offer, stating that the conditionality and uncertainties surrounding it meant that there was no assurance it would materialise into a binding offer. Consequently, Vonex reaffirmed its commitment to the existing Scheme of Arrangement with MaxoTel and urged its shareholders to follow suit.
“The Vonex Board does not consider the Swoop offer to be superior to the MaxoTel offer, and shareholders should take no action in relation to the Swoop offer,” Vonex released in it’s statement to shareholders.
Vonex’s leadership further stressed that the MaxoTel scheme offered more clarity and security for shareholders, with all Directors committed to voting in favour of it in the absence of a superior offer.
The Swoop offer has come more than 2 months after MaxoTel and Vonex entered into a Scheme of Arrangement which includes a break fee of $350,000 payable by Vonex to MaxoTel and by MaxoTel to Vonex under certain circumstances that may be triggered by delays in the Scheme implementation process.
In their recent FY24 results, Vonex reported $48.2 million revenue which represented a 6% increase on the previous year. This flowed down to EBITDA of $5.3 million for the telco business which offers infrastructure solutions and hosted PBX and VoIP services predominantly to small to medium enterprise customers.
The Scheme Meeting for Vonex shareholders is scheduled to be held on 23 September 2024 to vote on the MaxoTel offer.
Mitch Korver is a Business Writer focused on high-growth companies listed on the ASX in the small and medium cap space.
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