In a string of acquisition offers, TPG Telecom (ASX:TPM) has made a counter offer to acquire iiNet (ASX:IIN). In March, TPG made a $1.4bn offer to purchase iiNet. As shareholders contemplated the deal, M2 Group (ASX:MTU) offered $2.25bn for the company including additional benefits, beating the original deal. On Wednesday, TPG upped its offer in the wake of the M2 deal, offering $9.55 per share for a total of $1.57bn. The new deal will offer either a cash or script option for shareholders. iiNet shareholders may chose to take a cash offering of $8.80 per share, but those who take the script offering will receive $9.55 and 0.969 TPG shares for every iiNet share already owned. TPG will offer no more than 27.5m shares of its company in the offer.
Although M2’s offering is higher, iiNet Chairman Michael Smith supported the value of the new deal. “The board has weighed up both offers and given careful consideration to the merits of a primarily cash-based offer, to one which predominantly comprised scrip. We believe the revised cash offer of $9.55 from TPG is favourable to M2’s predominantly scrip offer,” he said. “The iiNet board recommends all shareholders vote in favour of the revised TPG offer at the planned scheme meeting, in the absence of a superior proposal and subject to the independent expert concluding that the TPG scheme is in the best interests of iiNet shareholders.”
Shares of TPM are up 35c, or 3.98 per cent, at $9.14 per share around 12:55pm on Wednesday. TPM has advanced 53 per cent in the last 12 months and 35.11 per cent so far this year. IIN is down 24c, or 2.4 per cent, at $9.76 per share so far on Wednesday. IIN has advanced 37.66 per cent in the last 12 months and 24.02 per cent so far this year. MTU is down 15c, or 1.35 per cent so far on Wednesday. MTU has advanced 92.62 per cent in the last 12 months and 34.81 per cent so far this year.
Author: Simon Herrmann
May 06, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.