The Australian telecom provider TPG, owned by billionaire David Teoh, on Friday tossed an offer for iiNet of around US$8.60 per share, on behalf of a 30% premium to its past cash cost. The elongated group would be having about 1.7 million broadband users, putting it far ahead of Optus, which has 990,000 subscribers. Now it is only behind market giant Telstra.
A note on the public register of ACCC stated that it would be observing the proposed procurement. It states that the ACCC will initiate a public assessment once a submission is received from either of the merging entities. The ACCC will ask for comments when the public assessment initiates.
An approach on iiNet had been subjected to speculate for long, ever since TPG came on the iiNet register having a 6.25% shareholding. Shares in both TPG and iiNet soared on Friday on the back of this offer, with iiNet climbing around 24.8% to US$8.50 and TPG jumping 17.7% to reach US$9.11.
It has been predicted that the extended group will generate annual revenues of around US$2.3 billion and income before taxation, interest, downgrading, and paying off of around US$654 million. The projected merger has already been disapproved of by the Greens, who cautioned that the merger would annihilate the little remaining segregation in the broadband industry and asked the ACCC to counter the deal.
Mr. Michael Malone, the founder of iiNet, had founded the company in the garage of his Perth home in 1993. He still has a share of about 4% and would achieve more than US$55 million under the deal.