Australia’s TPG Telecom has raised its offer to buy a majority stake in local ISP iiNet following a rival bid from M2.
Shunning M2, iinet’s board has now recommended the new proposal from TPG, which implies an enterprise value of A$1.9bn and a…
Australia’s TPG Telecom has raised its offer to buy a majority stake in local ISP iiNet following a rival bid from M2.
Shunning M2, iinet’s board has now recommended the new proposal from TPG, which implies an enterprise value of A$1.9bn and a 9.9x EV/EBITDA multiple.
The bidding war has meant TPG is paying A$500m more than the original A$1.4bn price agreed with iiNet’s board in March.
TPG’s first offer of A$8.60 in cash per share and a commitment to pay iiNet’s planned mid-year dividend of A$0.105 a share was scuppered by M2 in April. TPG’s rival offered iiNet shareholders 0.803 M2 shares, plus a A$0.75 special dividend, for each iiNet share tendered, equating to A$1.6bn.
But TPG has now trumped M2 by offering A$9.55 for each iiNet share, incorporating a $0.75 special dividend.
The new offer allows iiNet shareholders to choose whether to receive the consideration in cash or TPG stock.
In a presentation to its shareholders, iiNet said: “The iiNet board unanimously recommends that iiNet shareholders vote in favour of the revised TPG offer, in the absence of a superior proposal and subject to the independent expert concluding that the revised TPG offer is in the best interests of iiNet shareholders.”
TPG hired Macquarie Capital as financial adviser and Minter Ellison as legal counsel. iiNet is financially advised by Azure Capital, with K&L Gates providing legal advice.
Meanwhile M2’s exclusive financial adviser is Goldman Sachs, while Allens is acting as legal adviser.
