Swoop challenges MaxoTel with $0.040 per Vonex share offer

Swoop has announced a non-binding indicative proposal to acquire 100% of Vonex Limited, positioning itself as a competitor to the scheme of arrangement with Maxo Telecommunications that Vonex announced in June 2024.

The offer from Swoop consists of a combination of cash and shares, with Vonex shareholders able to choose from various combinations, subject to certain limits.

Swoop’s proposal offers $0.040 per Vonex share, providing a premium compared to the $0.0375 per share offered under MaxoTel's scheme. This new proposal allows Vonex shareholders potential exposure to the combined business and the associated synergies, as stated in the press release.

James Spenceley, Swoop's Chairperson, remarked on the advantages of the proposed acquisition, saying, "This would be an excellent transaction for Swoop and Vonex shareholders. 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."

Spenceley added that the acquisition would be an exciting opportunity for both existing and incoming shareholders, particularly given Swoop's recent achievements in winning major infrastructure contracts, disposing of non-core assets, and showing above-market organic growth.

The offer's terms include expectations of significant synergies, with Swoop anticipating over $5 million EBITDA on an annualised basis. The company also highlights the potential for rollover relief for Vonex shareholders who opt to receive shares as part of their consideration.

Swoop has indicated that it has received an indicative term sheet and support from its existing financier, Westpac, to fund the acquisition. According to the company, the expected synergies from the acquisition would significantly enhance cash flow for Swoop. The combined business is projected to have a pro forma revenue of approximately $137 million for the fiscal year 2024.

Spenceley expressed optimism about the potential discussion with Vonex’s Board and major shareholders, aiming to create "The next large-scale national telecommunications company."

According to the company, Swoop stands to create substantial value for both Vonex and Swoop shareholders and asserts that the proposal represents superior value compared to the MaxoTel scheme.

Swoop is a national provider of data and voice services to wholesale, business and residential customers with a focus on its own fibre and fixed wireless infrastructure. The Swoop network is designed and scaled to deliver ultra-reliable, high throughput, flexible telecom network services. Swoop is established and has the goal to build its business to become Australia's best challenger internet and telecommunications provider.