Speculation of Vocus bid for BigAir (BGL, VOC)

Recently the Australian Financial Review has printed rumours that wholesale telecoms operator Vocus Communications (VOC) is eyeing BigAir as a potential acquisition target.  Vocus have made data centre and fibre acquisitions recently, and Vocus’ wholesale business focus would make it an appropriate home for a company like BigAir, whose main channel to the market is wholesale.

 

While these are only rumours, BigAir’s CEO Jason Ashton has confirmed that “We’ve had chats with Vocus here and there but there’s been no formal dialogue or proposal” which sounds pretty good to me.  I certainly picked the right time to double my holdings, just a few days before the share price zoomed up to today’s close of 28c

 

As BGL’s market capitalisation rapidly approaches $50M, any takeover would be significantly larger than other Vocus acquisitions such as the $3.9M purchase of Digital River or the $6.3M acquisition of PerthIX.  Analysts have supported the move but suggested that a buyout would need to be funded by a mix of shares and cash.  I’m still uncertain about whether I’d take a cash/share offer or just sell my shares into the face of any deal (providing the share price roughly reflects the value of any Vocus offer).

 

Vocus have made smart acquisitions to support their wholesale strategy and they’re certainly no dummies for wanting to snap up BGL!

After trading around the 20c mark for the past year, BGL's share price has rocketed 50% in the past month