<html><head></head><body style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space; color: rgb(0, 0, 0); font-size: 14px; font-family: Calibri, sans-serif;"><div style="font-family: Calibri, sans-serif; font-size: 14px;">I have to say it’s been a remarkable few days in the industry and there is much more to happen ahead. I agree that it isn’t “nice” to acquire blocking stakes in companies to thwart your competitors from winning the prize. But it isn’t necessarily (and is actually rarely) anti-competitive under the law unless you were the monopoly or at least had significant market influence. In this case you could expect it would be pretty reasonable to argue with the ACCC that NOT letting Vocus acquiring Amcom is actually better for competition as there are more players in the market, more east coast providers etc.. (Granted I can also see the counter to that argument too, being that a stronger Amcom/Vocus entity would create a new alternative national provider – which I think is more realistic and beneficial for competition). Agree it is not “nice” and I sincerely feel for both Amcom and Vocus. I particularly feel for the Amcom shareholders who have probably lost a tremendous opportunity to exit/merge with Vocus. Share price is down 15% today and Vocus haven’t been affected much. Market is a good indicator of value shifting here.</div><div style="font-family: Calibri, sans-serif; font-size: 14px;"><br></div><div style="font-family: Calibri, sans-serif; font-size: 14px;">But lets keep a bit of perspective…</div><div style="font-family: Calibri, sans-serif; font-size: 14px;"><br></div><div style="font-family: Calibri, sans-serif; font-size: 14px;">Just last month Vocus acquired 15% of Macquarie Telecom as a “strategic stake” more than likely as a blocking stake/foot on an option. Smart move again from Vocus and appreciate there was no deal in play, but rumours suggested it was being sized up by multiple parties.</div><div style="font-family: Calibri, sans-serif; font-size: 14px;"><h3 class="r" style="font-weight: normal; margin: 0px; padding: 0px; overflow: hidden; text-overflow: ellipsis; white-space: nowrap; color: rgb(34, 34, 34); font-family: arial, sans-serif; widows: 1; background-color: rgb(255, 255, 255);"><a href="http://www.arnnet.com.au/article/572879/vocus-buys-15-million-stake-macquarie-telecom/" style="font-size: 12px;">http://www.arnnet.com.au/article/572879/vocus-buys-15-million-stake-macquarie-telecom/</a></h3></div><div style="font-family: Calibri, sans-serif; font-size: 14px;"><br></div><div>Vocus’ 15% stops any friendly/compulsory takeover of Macquarie (need 90% minimum acceptance). 100% minus Vocus’ 15% is 85% maximum acceptance. No can do.</div><div><br></div><div>But more interestingly in the case of Macquarie Telecom where the founders and major shareholders are on the Board (Directors) and own approx 60% of the shares on issue, under the alternative takeover process called Scheme of Arrangement (which is what Vocus proposed for Amcom and TPG for iiNet) you are required to get 75% of the eligible votes on the day of voting – and importantly the Directors of the Company cannot vote their shares. With Macquarie Telecom that would mean the Tudehope’s vote can’t be counted and therefore there is less than 40% of the shares available to be voted on. With Vocus holding 15% there can be no takeover via scheme without Vocus’ approval. If Vocus vote against any future scheme then the maximum vote possible is 70% which is less than the 75% threshold. Therefore Vocus stake in Macquarie Telecom acquired last month has the exact same effect as the blocking stake now held by TPG in Amcom (actually Vocus and Amcom could still theoretically go ahead). It will be difficult for Vocus to seriously argue the merits of this without drawing attention to their actions a month earlier. The value of hindsight I suppose.</div><div style="font-family: Calibri, sans-serif; font-size: 14px;"><br></div><div style="font-family: Calibri, sans-serif; font-size: 14px;">The next thing to watch is what happens in the week with M2 and iiNet. Under the Scheme Document TPG will have 4 business days (I think) to counter M2’s offer. This will all keep playing out over the next week. I think there maybe merit in Vocus/Amcom arguing with the ACCC that if TPG do get their hands on iiNet, then as part of their approval they should required TPG to dispose of their (or related parties) interests in Amcom. TPG will be the second largest player in terms of broadband, acquired two (2) domestic/metro fibre networks and their stake in Amcom at that point could be argued to be bad enough for the ACCC to make it a term of conditional approval (i.e. approved subject to disposal). Time will tell and unfortunately the iiNet/M2/TPG battle probably won’t be decided until after the upcoming Vocus/Amcom vote (unless delayed). If M2 get iiNet, then I think the Amcom stake held by TPG will stay.</div><div style="font-family: Calibri, sans-serif; font-size: 14px;"><br></div><div style="font-family: Calibri, sans-serif; font-size: 14px;">An interesting wrinkle/concept is that iiNet/M2 (and to some extent Vocus/Amcom) have as a possible option is that even if TPG/DT did block a deal between in iiNet and M2, there is nothing stopping iiNet breaking the offer (except for the lazy $15m in break fees) reversing the tables and having a friendly crack at M2 at exactly the same transaction with the same value, just that iiNet is the "acquirer" and M2 is the “target". This would effectively kill of TPG’s blocking stake because shareholder approval by the acquirer is only 50% as long as no shareholder in the new merged entity would control more than 20% (which I’m pretty sure is the case in both iiNet/M2 and Vocus/Amcom) then the deal would proceed. Again the same reverse takeover could apply to Vocus/Amcom.</div><div style="font-family: Calibri, sans-serif; font-size: 14px;"><br></div><div style="font-family: Calibri, sans-serif; font-size: 14px;">Anyway, there’s some smart operators with some smart advisors and and it’s not even half time me thinks.</div><div style="font-family: Calibri, sans-serif; font-size: 14px;"><br></div><div style="font-family: Calibri, sans-serif; font-size: 14px;">Cheers</div><div style="font-family: Calibri, sans-serif; font-size: 14px;"><br></div><div style="font-family: Calibri, sans-serif; font-size: 14px;">[b]</div><div style="font-family: Calibri, sans-serif; font-size: 14px;"><br></div><span id="OLK_SRC_BODY_SECTION" style="font-family: Calibri, sans-serif; font-size: 14px;"><div style="font-family:Calibri; font-size:11pt; text-align:left; color:black; BORDER-BOTTOM: medium none; BORDER-LEFT: medium none; PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; BORDER-TOP: #b5c4df 1pt solid; BORDER-RIGHT: medium none; PADDING-TOP: 3pt"><span style="font-weight:bold">From: </span> Shane Short <<a href="mailto:shane@short.id.au">shane@short.id.au</a>><br><span style="font-weight:bold">Date: </span> Thursday, 30 April 2015 3:53 pm<br><span style="font-weight:bold">To: </span> Damian Guppy <<a href="mailto:the.damo@gmail.com">the.damo@gmail.com</a>><br><span style="font-weight:bold">Cc: </span> "<a href="mailto:ausnog@lists.ausnog.net">ausnog@lists.ausnog.net</a>" <<a href="mailto:ausnog@lists.ausnog.net">ausnog@lists.ausnog.net</a>><br><span style="font-weight:bold">Subject: </span> Re: [AusNOG] TPG vs the World<br></div><div><br></div><div><meta content="text/html; charset=UTF-8" http-equiv="Content-Type"><div bgcolor="#FFFFFF" text="#000000">I think investing in a
competitor to stop them being bought by another competitor, so you then
don't have to compete with them is by definition anti-competitive (well
it should be by the amount of times I said compet*).<br>
Some analysts have mentioned this might be a shot across the bow to
iiNet implying "take our deal over M2's, or we'll do this to you and
block the M2 deal too".<br><br>
Regardless of the end game, it's clear Teoh's got his shit in a twist
about something and he's throwing his money around to get his way.
Hopefully the anti-telstra commission step in and do something useful.<br><br>
Regarding consolidation in the industry, it's bound to happen, if
nothing else the POI/CVC charges are going to make it extremely
difficult for national carriers to offer services everywhere-- but it
does open another potential avenue; where you have smaller players
focusing on their own little back yards, buying connections to specific
POIs inside their market; almost like the dialup days before MegaPOP.<br><br>
-Shane<br><br>
Damian Guppy wrote:
<blockquote cite="mid:CAONJJ+Tdezi4U5XpiABVq-QCV9_33XygixT1NwDobufD8D6HjA@mail.gmail.com" type="cite">
<div dir="ltr">Lets just take TPG, M2, iiNet, Amcom, and Vocus, and
merge them all into one giant company. That way we can stop all this
fighting. We can take the names of the top two companys (TPG and M2) and
combine their names to be T2.<div><br></div><div>Wait....</div><div><br></div><div>But
seriously, it is clear TPG is just blocking the Vocus+Amcom stuff just
because they don't want that competition. I wouldn't call it "toys being
thrown out of the sandbox" but just very very aggressive corporate
dealings by TPG. At some point they are bound to cross the line, and
this could be that line. Consolidation in the telco sector is inevitable
thanks to the NBN. </div><div><br></div><div>--Damian</div></div>
<div class="gmail_extra"><br><div class="gmail_quote">On Thu, Apr 30,
2015 at 10:25 AM, Brad Peczka <span dir="ltr"><<a moz-do-not-send="true" href="mailto:brad@bradpeczka.com" target="_blank">brad@bradpeczka.com</a>></span>
wrote:<br><blockquote class="gmail_quote" style="margin:0 0 0
.8ex;border-left:1px #ccc solid;padding-left:1ex">TPGs campaign to own
every customer and strand of fibre in Australia continues, with an
announcement from Amcom this morning (<a moz-do-not-send="true" href="http://www.asx.com.au/asxpdf/20150430/pdf/42y7jb0tv5530k.pdf" target="_blank">http://www.asx.com.au/asxpdf/20150430/pdf/42y7jb0tv5530k.pdf</a>)
stating that they intend to refer TPGs actions and purchase of a
blocking stake to the ACCC.<br><br>
There was a related article on ITNews (<a moz-do-not-send="true" href="http://www.itnews.com.au/News/403386,tpg-boosts-amcom-stake-to-block-vocus-merger.aspx" target="_blank">http://www.itnews.com.au/News/403386,tpg-boosts-amcom-stake-to-block-vocus-merger.aspx</a>),
in which James from Vocus makes some choice quotes - my personal
favourite being "And that's the shame of it, one anti-competitive telco
is affecting the value and the future of 9000 mums and dads. It's
disgusting really."<br><br>
>From the outside looking in, the whole TPG/Vocus/Amcom thing smacks of
toys being thrown out of the sandbox because TPG can't have it all their
way. The act of buying shares to block a merger without making a
competing offer screams anti-competitive behaviour, though there's no
undertaking that TPG won't make a bid for Amcom at a later date (and
lower price?) if the Vocus deal gets scuttled?<br><br>
Looks like interesting times ahead for all involved in the iiNet and
Amcom deals...<br><br>
Regards,<br>
-Brad.<br>
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