Australian ISP iiNet’s (ASX:IIN) shareholders have approved TPG Telecom’s (ASX:TPM) A$1.56bn (US$1.14bn) takeover offer to form the country’s second-largest fixed-line operator.
Just over 95% of votes cast were in favour of the scheme of…
Australian ISP iiNet’s (ASX:IIN) shareholders have approved TPG Telecom’s (ASX:TPM) A$1.56bn (US$1.14bn) takeover offer to form the country’s second-largest fixed-line operator.
Just over 95% of votes cast were in favour of the scheme of arrangement, despite earlier criticisms from iiNet founder Michael Malone and investors including Hamish Carlisle, a portfolio manager with a stake of about 3%.
The deal, subject to Australian Competition and Consumer Commission (ACCC) approval, will see TPG pay A$9.55 per iiNet share, incorporating a A$8.80 cash or scrip component and a A$0.75 special dividend.
It is worth about A$500m (US$364m) more than TPG’s original takeover offer, which was approved by iiNet’s board in March but trumped a month later by rival ISP M2.
M2, which bought New Zealand broadband player Call Plus earlier in the year, made a A$1.6bn (US$1.6bn) bid that would have seen iiNet shareholders own about 42% of the combined group, on top of the A$0.75 special dividend.
TPG was given the opportunity to sweeten its offer and made its latest proposal in May, prompting M2 to scrap its deal.
Some analysts had expected a rival bid from Optus, the country’s current number two fixed-line player, but this never materialised.
The ACCC plans to make a final decision on the merger by 20 August, after which iiNet plans to seek approval from an Australian court at a hearing scheduled for 21 August. It expects to implement the scheme on 7 September.
Addressing the shareholder meeting before its vote earlier today, iiNet chairman Michael Smith said: “The takeover process we have been through over recent months demonstrates how strategically valuable iiNet has become to national players in the telecommunications sector as the industry heads towards an inevitable consolidation phase.”
The consolidation wave sweeping the country recently saw Vocus and Amcom merge their telecoms businesses in a A$1.2bn deal. Shareholders approved their scheme of arrangement despite TPG buying about 20% of Amcom to try to block the move.
TPG hired Macquarie Capital as financial adviser to take over iiNet, and Minter Ellison as legal counsel. iiNet received financial advice from Azure Capital and legal advice from K&L Gates.
Fixed-line incumbent Telstra is Australia’s largest fixed-lined player.
