Vocus group, page-175

@Maddy707

This to me speaks pretty loud regarding the article

"It would not surprise to see the company founder pop up in a bid to get his old assets back, however sources cautioned there was some way before that was likely, let alone possible.

And you also have to question how hard a leveraged buyer - or any buyer for that matter - could go at Vocus given uncertainties around both the business and its numbers".

PE would need to offer around $3.50 per share to entice shareholders to sell. A LBO offer would cost approx to be around $3.50 x 623.2m = $2.18b in debt. Given current debt is around $1b. Total debt would be $3.18b. This works out to be roughly $3.18b / 623.2m = $5.10 per share. i.e. they need to ensure they could chop it up to sell the company at a price to repay all debt (equivalent to $5.10 per share.) This is not factoring in they would need to make a profit on top. LBO margins are around 20% (for risk measures). So total sale PE would be looking for is $3.18b x 120% = $3.81b. Vocus was worth this price going back Nov 2016 before both profit downgrades. To me, Vocus is not currently worth the risk for PE. This was a very basic demonstration of a LBO but you get my drift.

Plus you also need to factor in golden parachutes. PE talk seems like a hail mary for current holders to me.

Just my 2 cents