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KKR bid for Australia's Vocus could attract rival offers

Jun. 7, 2017 8:01 PM ET|About: KKR (KKR)|By: Jason Aycock, SA News Editor



•KKR has offered $1.6B for Australian telecom Vocus Group (OTC:VCMMF), a move that analysts say outweighs the downside risk from poor earnings from the company.

•The deal would give KKR access to a strong fiber network reaching all of the country's state capitals, but analysts definitely account for another suitor coming in.

•Macquarie says the risk of a firm bid coming together are outweighed by the prospect of another bidder or a higher offer from KKR, though potential asset sales may affect Vocus' valuation.

•Ord Minnett, meanwhile, says the deal is a great fiber value particularly ahead of a 5G rollout, and the offer price is in line with a sum-of-the-parts analysis. (h/t: Bloomberg)