iiNet shareholders back TPG takeover
iiNet shareholders have finally voted to accept the $1.56 billion takeover offer from rival Retail Service Provider (RSP) TPG Telecom.
An earlier $1.4 billion bid by TPG in March was rejected by the iiNet board under pressure from the company’s founder, Michael Malone, who led shareholder opposition to the offer. Malone has now joined other shareholders in pocketing handsome profits from the deal which value at nearly $10 shares that not long ago were trading for 20c.
The enlarged TPG will now be the second largest Australian RSP in terms of internet subscriber numbers, with 1.7 million broadband customers to Optus’ 1.03 million. Even then, however, it will be dwarfed by Telstra’s 3 million subscribers.
These are the numbers the ACCC will have to consider when deciding whether to approve the deal. While industry consolidation always raises concerns about consumer choice and competitive pressure, the fact is that it is the only way that companies will be able to achieve the scale necessary to survive in the NBN world, let alone to challenge Telstra in the fixed broadband market.
