Macquarie, Aware Ready for Vocus Breaking Game

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It wouldn’t be the easiest sale. It is difficult to make money reselling NBNs or mobiles, with thin margins and stiff competition from the big three Telstra, Optus and TPG Telecom and smaller operators.

The value of these companies is normally the infrastructure that supports operations, although Macquarie and Aware are expected to retain this in Vocus.

To break up

Whatever happens, the asset separation would essentially unwind the $3 billion Vocus/M2 Group merger that unfolded in 2015 and 2016, to separate the infrastructure and retail businesses.

One is probably worth more than 15 times earnings, the other less than 10.

“Our retail business is now in a good financial position after managing the economic impact of NBN. It has a strong team, good assets, market-leading cost-to-serve and is performing well. new good on the market,” Russell said in his speech on Tuesday.

“This separation and likely sale process should free up the retail business to better compete and grow, while raising significant additional funds for Vocus Network Services.”

Comments will attract the attention of bankers. Credit Suisse and Morgan Stanley participated in the takeover of Vocus, while Macquarie Capital obviously retains close ties with its sister division Macquarie Asset Management.

UBS and Morgan Stanley also recently funded Vocus’ New Zealand coin Orcon, which acquired rival 2degrees. Orcon was also spun off from the wider Vocus group, with its own management team, capital structure, business plan, etc., creating the potential for a future float or sale.

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