[AusNOG] News: M2 makes competing bid for iiNet

[Seamus Ryan]

http://bit.ly/1HMChv5

dis gon b gud

From: AusNOG [mailto:ausnog-bounces at lists.ausnog.net] On Behalf Of Skeeve Stevens
Sent: Monday, 27 April 2015 1:49 PM
To: AusNOG Mailing List
Subject: [AusNOG] News: M2 makes competing bid for iiNet

Surprised that this is not in discussion.....

Here's the news.

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Subject: M2 lobs all-scrip $1.5b-plus bid for iiNet

Sources said iiNet's board and advisers were considering M2's bid over the weekend and were seeking to determine whether it was better than a $1.4 billion all-cash takeover it signed with TPG Telecom in March.

It's understood M2's bid put a significantly higher valuation on iiNet, but its scrip nature means iiNet's board needs to determine the value of M2 shares before deciding whether to recommend it to shareholders.

iiNet and M2 are known to have spoken on numerous occasions about a merger in recent years, although the two companies had not been able to agree a deal that would see them create Australia's second largest fixed broadband provider behind Telstra.

M2's bid comes soon after iiNet investors – including its largest shareholder BT Investment Management and company founder Michael Malone – called on their board to push TPG for a higher offer or test the market for a better bid.

A spokeswoman for M2 declined to comment on Sunday. iiNet's spokesman did not return calls seeking comment prior to deadline.

iiNet agreed an $8.60 a share takeover with TPG in March after only a short period of due diligence. Under the agreement signed by iiNet chairman Michael Smith and company secretary Ben Jenkins and TPG's David Teoh and Stephen Banfield on March 13, iiNet's board must notify TPG if it receives any serious competing offers or has talks with any parties that could lead to a firm bid.

TPG would have then three-days to make a counter bid before iiNet decided whether to break the proposed scheme of arrangement. It's understood the three-day period has not started although TPG is aware of other interest.

M2's entry into the race for iiNet is likely to surprise some analysts and investors who thought the acquisitive Melbourne-based company had ruled itself out by buying New Zealand's Call Plus Group for $250 million a fortnight ago.

However, investors will understand the logic. Buying iiNet would help M2, which owns the Dodo and iPrimus brands and has a $2 billion market capitalisation, create the country's second largest fixed broadband provider.

Credit Suisse analysts have previously said M2 stood out as the party most likely to create a bidding war for iiNet, given it also runs a low cost strategy and could generate meaningful synergies through the acquisition.

The analysts said the $14 million break free and no shop clause in TPG's agreed bid should not stop a rival offer.

Both iiNet and M2 shareholders will be keen to see the level of synergies M2 assumes in its bid. TPG declined to detail the exact amount of cost synergies it expects from the iiNet deal, although analysts have estimated them to be worth about $30 million next year and up to $60 million in following years.
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...Skeeve

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Skeeve Stevens - The ISP Guy - Internet Provider SME

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